PSA: Consider Regional Boutiques. Good Comp + Lifestyle

Thanks for sharing your experience. Where did you learn about industry specific boutiques? I was looking at boutiques in industrials and couldn't find too much information. 

While it seems that regional has panned out for you a lot of smaller shops are many times worse 1) meaningfully lower comp than BB 2) same worse hours 3) less support system (i.e, india time, tech support, etc.) 4) worse infrastructure which leads to overall an even worse experience and you don’t even get the brand name.

Also I’d argue that the last thing I’d want to do as an associate is the need to source my deals in IB. If I’m a junior associate I’m already drowning in work I don’t have the network nor time to be bringing in deals. While understanding IB end game is a sales job I’d rather slowly build out my network ~8 years from A-VP stint 

I would also echo this to those that have buy side aspirations. Look into regional/community banks. I work in my banks treasury team with a focus on the investment portfolio. You’ll gain experience across different products/asset classes and get a chance to interact with large sell side banks and make some good relationships with a ton of MDs/EDs. Plus a lot of things that I work on have exposure to the executive management team so it also gets me excellent internal exposure.

Of course less prestigious and the pay is lower, but there is definitely the potential to leverage the experience/relations and change that very quickly if you want.

Where do you find these solid regional boutiques and what is the recruiting process like for them

$630k? In your 4th year? Wow. 

Thanks for the insight. I'm interning at a no name regional this summer and curious about what they make. Small, real lean shop exact same hours as you said that does about 7 deals a year anywhere from 100-500mm. Should be interesting

PSA: Not all regional boutiques are like this

Have spent the past year at a no-name regional bank getting grinded 8am - 12am S-F + 3-5 hours of work on Saturday.

Comp is well-below street (65 + 25) and we have zero resources to do anything. The "hands-on" experience of boutiques turns into mindless grunt work (even worse than usual) and endless pitches for deals we are not qualified to win.

Make sure that you vet where you are going and don't assume you will be at a lifestyle shop. Nothing worse than getting relentlessly grinded while working on sub-$50M deals with unsophisticated management teams

People don’t understand this and it’s always BB or bust. Get that experience in and if you want to go to a HF/PE then maybe lateral? I assume lateraling to a better bank isn’t difficult?

Rando79485

It seems that most people on this forum have the mindset of BB/EB or bust and I wanted to share some insight as someone who works at a "no-name" boutique (no-name to the average person in finance, but well-known within my industry) and have really enjoyed my time thus far. 

There are a lot of regional M&A boutiques out there that are focused on a specific niche that I imagine do very well for themselves. I can only speak for mine and my friends experience, but we're both generally happy with the lifestyle and are paid above market. Some of the niches I've seen include banks focused on food and beverage, restaurants, cosmetic products, niche area of industrials, etc. 

I'll start with the cons of working a smaller, less-known bank:

Cons

Exit Ops:

I have 0% chance of getting a top exit that you see people constantly aim for on this board. In my current position, I will never exit to a top HF/PE fund. I likely won't even have the opportunity to exit to a UMM/MM PE fund. That being said, several of my colleagues have exited to LMM PE funds (<$500 AUM)  to their respective industry deal teams. They had a tremendous amount of exposure to these funds through the deals that we primarily work on and had an easy time recruiting.

However, from what I've seen there are a large number of people at BB/EB banks that don't get the "goal" exit anyway. Many exit to Corp Dev type roles that are identical to the roles my colleagues have landed. The biggest thing here is optionality. Perhaps someone at a BB could exit to a wide variety of Corp Dev roles while folks at my firm are again pigeon-holed to the industry that we cover.

Long-Term Comp:

The deals are obviously much smaller than a BB/EB and thus the fees are smaller. In the long-run, having smaller fees results in a lower comp ceiling compared to someone at a larger bank/PE fund. I don't think that even the top MDs at my firm makes more than $2 million a year.

Training:

There was no formal training program and you were at the mercy of others on your deal team to show you the ropes. Some struggled, but generally everyone eventually gets up to speed.

Talent:

Our senior team comes from a very impressive background, but generally the people we hire (including me) aren't the most impressive in terms of intellect/background, but we get by.

Pros:

Lifestyle:

I average 50-60 hours a week. Typically I work from 8 am - 7 pm during the week (usually Fridays are a bit earlier around 5:30 - 6:30). Weekend work is typically 1-2 hours a week. Occasionally I'll have to work late into the night or through the weekend, but this is typically less than one occurrence a month and it is expected which brings me to my next point of predictability. There are very little fire drills or super last minute requests from seniors that would take up my weekend or evening.

Generally, I know when this is coming i.e working through critical phases of diligence, offers coming in, etc. It's a much different experience being able to plan for the occasional long night/weekend compared to what I see on the board of having it come out of the blue and having to cancel plans. I'm also encouraged to take my vacation days and the team respects when someone is out. Sure I might have to respond to an occasional email while away, but the team is generally willing to help out to ensure I don't have to open excel/PP on the trip.

Respect from seniors:

Senior members of the firm are generally super reasonable/don't make a ton of irrational requests. If I receive a Saturday morning email request, I can be honest and say that I'm out a brewery or something and can get to it in the evening when I'm back rather than sprinting home to complete the task (within reason of course, sometimes you gotta do what you gotta do if it's urgent, but this is very rare).

Additionally, our senior guys are confident when pitching from their exp and as a result don't make us do a ton of unnecessary slide work for pitches. Our decks are pretty concise unlike some of the horror stories you hear here.

Comp:

I'm paid at or above street and believe I will be until the senior level. Many of these banks offer some sort of profit sharing program that can be very lucrative. Reference below:

Analyst 1: $65k base + discretionary bonus + 3% of the fees from deals that I worked on (this % increases meaningfully each year based on title/performance) 

I was on $2 million worth of deal fees (average is around $2 - 3 million, 1 or 2 deals) so my profit sharing bonus from deals this year was $60k. 10k discretionary bonus at end of year (I believe for those that get screwed on the profit share bonus due to a deal falling through get a higher discretionary bonus to make up for it. All in $135k

Analyst 2: All in $185k

Associate 1: All in $395k

At the associate level you are able to start participating in sourcing efforts similar to a TA/Summit model. This has drastic upside as you receive 10-15% of the fee at this level if you manage to source a deal that closes. Got lucky and was able to source a deal with a nice fee.

Associate 2: All in $630k. Was able to source two deals this year that closed. 

I believe the range for positions above me is typically: VPs $400k - $700k, director $500k - $800k, MD $800k - 1.2m

This comp package is in line with a friend of mine who works at similar type of bank.

Just some food for thought. There's a ton of opportunity out there at the MM/LMM level and sometimes it's better to be the bigger fish in a smaller pond.

Thanks for posting this it will give some people hope and inspiration.

I interned at a good boutique. Only worked in four niches within an industry but dominated sell side in those areas. Base was 75k plus bonus. Good year was 75%, average year 50%, bad year was 25%. Associate was 120k plus bonus - unsure of the percentages but I know there was no opportunity for them to source deals. VPs had the opportunity to source deals, but there was only one and he had no time to source as all his time was mgmt of the junior bankers and communicating with clients. 

Excellent and useful insight -- thanks for sharing, and exposing us to possibilities and pros of regional banking.

What is the best way to find boutiques that have good enough deal flow (that could obviously translate to better pay & hours even)?

following

It is my first year and I will make over $200K at a regional bank.

I work for a "no name" M&A boutique and I can concur that experiences at boutique are very mixed. In my case, I am far happier than I would otherwise at a BB. I work 50 hours a week, I have a lot of responsibilties and get to interact with our clients, and I have a lot of flexbility. But I get paid below street. For all these reasons, I think that anyone who is not only interested in prestige or exits opps should look to work for boutiques. There, you are the captain of your career. If you are not good at what you do, you will not be able to hide behind a BB name to find another job. But if you are good, people will notice it and you'll get plenty of nice exit. I think of working in a boutique a bit like being an entrepreneur. You are a key element of the success of your own career. Latly, I felt like I could handle a whole M&A process on my own, whereas I don't think it would have been the case at a BB/EB. I got to work on 15 deals in various industries and I met with incredible C-level executives. The latter is particulary stressful as I am only an analyst with limited knowledge, but in the end the learning curve is much bigger. 

“Competition is for losers.” - Peter Thiel

Agree that there is something off about the herd mentality around chasing prestige and grinding it out to compete in global gateway markets (NY, SF, etc.) with the best of the best. There are only so many slots. 

There is something to be said about being a little contrarian, particularly in the Sun Belt growth markets. You won’t get paid the same but your cost of living will be approximately 1/2 (e.g., being able to buy your first house or condo in your 20s is not out of the question for most like it is in the gateway markets), and your quality of life will probably be 2x.

Being a bigger fish in a smaller pond is far more fun than being a small fish in a big pond.

I'm going to echo OP's points. I think this post perfectly sums up the regional boutique environment.

Yes this!! Also the amount of responsibility and experience you get at a smaller bank is tremendous. I’ve had bigger responsibilities and direct interactions with our clients that many friends that work at BBs/EBs

Could you list a few types od regional boutiques that you're talking about?

What are the best “regional boutiques”?

I am currently recruiting for 2022 SA positions but after reading this I am really interested in wanting to get a SA and a 1st year analyst role at a boutique.

I’m a rising junior at a non target double majoring in finance and Econ - 3.75 GPA. I am currently doing an internship at a search fund. How does the timeline look for summer internships at boutiques in NY and what should I do to better my chances of landing a summer internship and 1st year analyst role?

OP, what geography is this in, if you don't mind me asking? I'm also attracted to regional boutiques and have a geography in mind (NE) so curious if this is in the same area..

Random bump but this is a very interesting post.

Know someone within my close circle who works at an advisory firm like this. If you're able to source deals, a lot of juniors clear 300-400K fairly easily at the associate/VP level. 60 hour work weeks during deals with minimal weekend work since it's primarily focused on LMM ($10-50M businesses). They do sell smaller companies worth <$5M too. Deal flow is constant.

Used to work in an office building that had some ex BB MDs run a small industry boutique. Super lean team, I don't think they really had more than 2 juniors. Not sure if they made their fortunes on Wall Street or at their regional boutique but I met a few of their VPs/MDs and all of them were driving 100K+ cars (founder has a Lambo). I assume it was a well paying boutique from what I saw.

Echoing the workload comments, I work at an industry-specific boutique and my hours are typically 50-60 per week with a few hours on the weekend. That can crank up to the 70-80 range during particularly busy weeks, but almost never meaningfully above that. However, comp does leave something to be desired. All-in, I probably will pull in ~$225K this year, and that includes receiving a portion of total firm revenue. 

All these high school nerds on WSO think that no name boutique = terrible pay. While that could be the case at a lot of shops, mine (Los Angeles) was pretty similar to any well known shop this year. Got bumped to 100, 15k signing, and got 100k bonus my first year. If you want to sweat at a BB/EB, that’s fine. You will get the exits that I won’t. But honestly, I couldn’t care less. I get to surf 4 times a week, girls are hotter (stay malding and coping ugly NYC men who claim LA dating is “hard” you just aren’t that special), and I have actual agency vs. being a cog in a huge machine.