Let's talk about the word 'prestige'.
Now, it has bandied around as late. But what does it actually mean to you?
For me, I am looking for one thing out of my career; quality of life. Before everyone jumps me, money plays a large role in this. Short term, money is the quickest way to make large QOL improvements. Obviously, there comes an inflection point where more money doesn't pay off (sorry, I had to...) and the emphasis goes back to time spent outside of work.
So where does prestige fit in to this? Is prestife referring to brand equity on a resume? Something to get you from your current employment to a better bank/b-school/fame and fortune?
We always hear about people wanting to go from Tier 2 to Tier 1 (the tiers don't exist where I work, but say they do...), is this purely for the extra $10k you will earn? Is it to solidify your application for B-School?
Or, is prestige a social standing type deal? Do you want to tell people you work at GS, ML or MS? I don't really see the point here. I guess it is something you look for when you aren't in the industry. Again, for me, it matters more who I work with. Obviously, in this environment you are working long hours, getting in the right group is paramount. It is a people business, and if you don't like the people, you're screwed. We have a few SA's in our group that have dollar signs in their eyes, and don't really get the social side of the deal. They won't get offers.
What is still can't quite grasp is why? Why does prestige matter? When people ask me what I do and I answer, this amazingly blank stare comes over their face. I'm nothing more than their local banker to them.
Thoughts?
1) An excuse people use to justify treating others like crap or looking down on them.
2) Brand Equity that gives others (who share the same opinions on the prestige rating of wherever you worked) the impression that you are more intelligent than you would have been if the name wasn't on the resume.
The only time "prestige" matters in when you are first out of ugrad, because having a good name on your resume can open up doors later on.
That fades away very quickly, however, as there is not anyone who is VP level or higher who gives a damn about prestige. Once you have been in the business for a few years you only care about who is willing to pay you the most money and give you the best opporunity (the latter primarily applies to more senior people who are given the chance to create a new business at another shop, for example).
Why do you think there is so much turnover on Wall Street? There is not a single senior person on my desk who hasn't worked at at least 2 other investment banks over their career.
It is more than money and prestige that affects the choice between Tier 1 & Tier 2.
For instance, as an Associate/VP, it is much less interesting playing co-manager or 2nd tier advisor than it is to be leading the deal. Now, this doesn't mean you will get this experience necessarily at a Tier 1, it really depends on the specific bank, group and industry sector.
Let's use the Jefferies example. Sure, by no means "prestigious", but in their space (mid-market), they act a sole advisor on smaller M&A deals and lead mid-cap issuances.
Now JP Morgan - if you are in levfin, you are leading levfin deals, if you at MS, maybe not, yet MS is very "prestigious".
Prestige can be used as an imperfect proxy for deal flow. At a "tier 1" bank, for example, you have a better chance of getting that deal flow than at other banks.
That being said, there are definitely cases where you are at a less prestigious place and see more and vice versa. Although the prestige factor inherently may not effect you down the line, the deal volume and things you learn will.
It's definately used as am imperfect proxy for a few things. Deal flow is one. Remuneration is another. I think perceived deal flow and remuneration are two more that are probably more prominent than they should be.
it's very skewed even in the industry, the IBD guys have their world view, which is somewhat similar to the view most people out of college have. Different areas such as S&T, research, asset management have their own view. On the whole, the IBD prestige view has become very skewed and one held primarily by IBD guys, as their divisions have come to mean less and less to banks. IBD is kind of like ND football, but maybe even worse, in that they will never again be the most important group at a bank, but don't want to admit to it (and at some banks like GS, a footnote in revenue generation ability)
I somewhat agree that IBDers view it differently, but I do not pretend like I know about prestige across entire banks. This is an IBD board, so I would presume we are talking about the prestige of that IBD operations alone.
IBD is a lot less profitable for banks than other divisions. It is highly competitive and the margins are pretty poor since they have to hand out most revenue in comp or else people leave.
That being said, Goldman still calls IBD the face of the bank despite the fact that it make up less then 20% of the firm’s revenue. It leads to business elsewhere, and is still an essential function that fits well until the total business model. They have still seen it fit to invest heavily in poaching people and keeping the number 1 in M&A, so clearly it is more than a footnote to the bank despite revenue numbers. Finally, its still a career that has a certain cachet and still very lucrative to work in.
You said IBD brings in business to other areas of the bank. True, but it works the other way around just as often. I'm in S&T (Commodity Derivatives) and we often bring in business for our IBD and PE groups. Reason is that many corporates you provide structured hegding strategies to may not have needed advisory or underwriting work before, but once they start using your salespeople and structurers to trade derivates it gives your IBD guys a foothold to build a new relationship.
Agreed. Point is that it is an integrated and important function of a bank.
Being prestigious is something positive. It's something to be sought after. What exactly is prestige? As far as employment goes, I'd suggest highly-sought after positions that are difficult to get into.
Isn't that rather shallow thinking?
It seems like a once removed reason. Why do the other people want to work there?
IBD makes only 20% of total revenue? Can you give a rough percentage breakdown of where bank revenue comes from?
I think prestige (on a personal level) varies by where you grow up, and surroundings during your adolescence. Everyone will have some stereotypical vision of prestige, and obviously GS comes to mind in banking.
But growing up in a town in NJ, people that worked at GS were not such hot shit, and getting into the PeaceCorps was more "prestigious" than working at Goldman Sachs. This was not a po dunk town by the way, where people did not know what GS was, but the town was more focused on academia/saving the world, despite being a fairly affluent area.
This doesn't necessarily represent my viewpoint, but it has shaped the way I look at prestige in the banking world compared to my friends at school, who may have grown up in the Midwest or something.
the K's and Q's and read the breakdown
Newborn--depends on the firm, but 50-75% of revenue is from sales, structuring, and trading (equities and fixed income). Then the 20-30% for IBD (advisory and underwriting). Then the rest is usually PE, alternative investments, HF, etc. But it depends on how the bank is structured. Of the top 10 hedge funds, 3 belong to banks (Goldman, JP Morgan, and Barclays). For Goldman, the HF activity is part of their revenue. For JPM and Barclays, however, the HF may not be a part of the actual Investment Bank, but may fall under another area of the bank or its own separate division, as an example.
their internal HF's/prop groups produce a ton of money. When I say intenral, I mean SSG and GSPS which is all GS capital (between them the produced ~7bn+ in revenue last year for the firm and are running almost 40bn between the two). THe HF's in the asset management group that get all the press and have performed poorly recently (Global Alpha, GEO, etc) is almost all client/external money, so GS only gets the fees from this (which aren't bad, but pale in comparison to the internal HF's). Obviously, GS just dropped 2bn in GEO and have been extremely well rewarded for it over the last 3 weeks as it has recovered ~15%(only GS can have a fund lose 30%+ of value and still end up being extremely profitable for the firm on the year). So it's not hard to see between the internal HF's, all of the prop trading in both FICC/Equities, the trading revenue and the PE activity (PIA has a lot of GS capital under belt, although they also take client/internal employee $$) why principalling and trading making up the lions share of the revenue/profit split. Other firms are less dependent on principalling, but still not hard to see why these activities produce more than banking revenues
thanks guys
Firm Prestige (Originally Posted: 04/27/2013)
So I'm looking for someone to come school me on the topic of firm prestige. Does it really matter if you work at Lazard? Every story I hear about there is a horror story so why do people want to work there instead of a less prestigious place? If I can learn just as much from another firm, get paid the same and work better hours with better people ins't the choice obvious? What kind of doors will a company like Lazard open? Thanks for any info.
Working at Lazard open up the front door and more.
But to open the front door after the analyst years, you will need to open up the back door first, ifyaknowhatimean
Lazard? Never heard of 'em.
depends on how greedy you are --- Top funds willing to pay big cash only have a few slots open for recruiting. The more prestigious your background, the more likely you land one of these big shot spots.
He's right. A good question is, if you don't come from "prestigious" (top 10/Ivy), how do you get in ?
Lower MM banks set you up for Lower MM PE shops. You'll get a lot more exposure to deals and management of portfolio companies. If that sounds good to you, go for a Lincoln, Baird, or Blair. If you want the absolute best shot at making it to MF PE or MF HF, go to Lazard or the BBs.
Most of the time, juniors looking for SAs don't have the luxury to choose which path they go down. It's more a matter of taking what you get and being happy with it.
If you look at their site, they've advertised -this month-for the class of 2011/12 Assoc. in General IB/M&A/Restructuring, also class of 2013 IB. http://www.lazard.com/SubmitResumeProf-Pos.html
What's with all this hype about lazard? The two guys I know there--one got a shitty MM PE job and the other is still recruiting. They also get completely crushed throughout the year by work
what year/school were they, and are you sure this is Laz not Laz MM?
So are the shit hours/people/atmosphere of the prestigious bank you go to work for simply for transferring over to PE/HF/etc.?
how does lazard rank against other elite boutiques like Moelis, Evercore, Pwp, Greenhill etc. ? are they like THE elite boutique?
Lets say a junior got Citi or something like RBC, could you still transition to a decent HF as long as you're a good investor and interviewer? Or do HH shut the door?
Hope you're not implying that citi and rbc are equal in terms of prestige...
You're free to have your own opinion but, //www.wallstreetoasis.com/forums/rbc-vs-citi-investment-banking
"In Canada"
Being the operative words. The same could be said of half the BBs operating in Canada as RBC and BMO dominate the deal flow.
And a LinkedIn search should answer your question. Do people seriously think that anything short of GS/MS/Elites willmdoom them to subpardom for the rest of their careers? In addition you should be much more concerned with group placement than firm placement, IMO.
This is correct.
However, RBC has been making some in-roads in the U.S., but is still even far from Citi. I know RBC FIG was particularly strong last year for M&A, not sure about other groups.
Plus, RBC is willing to play lower than Citi.
Prestige vs Fit (Originally Posted: 02/14/2014)
Hi Guys. I wanted to run a hypothetical question by you. I am currently applying for one year masters programmes. I've applied to one, which is focusing on the energy sector and its global impact. I have always been interested in energy sector, and the program seems like a really great fit, given my experience, etc. It is a relatively new program, and at a top 15 university... the other program i applied to is more of a generalist program, but at a top 5 uni.
Would you pick a program that you could excel at, and fits your profile better, or the more prestigious university?
Fit
Care to Elaborate a little?
It really comes down to what your ultimate goals are. It is unclear to me what field of study you are pursuing for this master's degree. You mention "energy sector and it's global impact" - so is this some kind of multi-disciplinary field in management, public policy, etc.?
If this was a straight-up Master's degree in Finance and your goal was to get a job on Wall Street after graduation, then I think the obvious choice is to go with the higher-ranked program. However, in your case, the answer is not so clear cut.
In either case, I would evaluate this decision based on what your ultimate goal or career objective is.
Fit. Stop caring about what other people think and do what makes you happy. A top 15 school in the states will certainly carry a high amount as prestige as well
So, pick a program that best fits your strenghts? I guess the question is, is it better to focus on devleoping strengths further, or broadening horizons?
If you need to program to launch your career (i.e. you lack experience, contacts, top undergraduate etc) then you have to go with the more prestigious program. If you're looking for pure knowledge because you have the aforementioned you should go with fit. More specifically to your point, you would think going to an energy focused masters gives you a better shot at energy banking/research roles vs. going to a top generalist MBA (includes Texas for energy) and picking up some energy on the side...it doesn't. I agree that it doesn't make sense but that's how it goes.
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