PSA: Consider Regional Boutiques. Good Comp + Lifestyle

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.

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Comments (27)

  • Associate 1 in PE - LBOs
May 14, 2021 - 1:31pm

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 

May 17, 2021 - 2:52pm

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 

Yeah all of this,  I did the boutique route starting out and I have to say the several banks I talked to, the comp was bad.  It seems like OP found a golden nugget but most of the shops were less/materially less than the maker rate.  Also having the ability to get comp from sourcing is good, but most of the time this will be near zero additional commission from most people. 

May 14, 2021 - 2:09pm

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.

  • VP in S&T - FI
May 15, 2021 - 5:56pm

What size bank are you at in terms of total assets and portfolio size?  Feel like the 15-30bn total asset size is the sweet spot if you are a more junior person.  Not so big where there is so many layers between you and senior management but not too small where the treasurer handles all the investment stuff and the junior people never get any exposure to the street or only has coverage from regionals.      

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May 15, 2021 - 6:15pm

10-15 billion asset size and 1.5 billion investment portfolio size. The Treasurer and I handle all aspects of the portfolio which is nice bc I don't get stuck w clerical work lol.

You're right about coverage, mostly regionals/smaller boutiques but we've established a lot of relationships and have been doing some good business with the larger banks such as JPM/GS/MS etc.

May 17, 2021 - 2:38pm

When it comes to regional firms / boutiques, there are no standards. Hours, culture, comp, recruiting, etc. you'll find some that operate just like a BB/EB and some tbat do everything differently.

Some will give you BB hours or more for less pay, some might do the opposite. There won't be very many blanket statements for breaking into these

May 17, 2021 - 1:09pm

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

  • Analyst 1 in IB-M&A
May 17, 2021 - 1:34pm

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

May 17, 2021 - 1:48pm

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?

May 17, 2021 - 2:17pm

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.

SafariJoe, wins again!
  • Analyst 1 in IB - Ind
May 17, 2021 - 2:32pm

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. 

  • Analyst 1 in IB-M&A
May 20, 2021 - 6:26am

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. 

  • Associate 3 in PE - Other
May 20, 2021 - 9:24am

PSA: Your mileage may vary, Hugely

I worked for 3 years at a regional boutique like OP described - nobody on this board would have heard of us, we focused on a specific industry and were known within it, and generally did pretty well. My experience was similar in some ways but completely different in others.

I was paid below street all 3 years. 85k/105k/115k. We got "guaranteed" flat quarterly bonuses (which is hilarious, why not just offer higher salary?) with upside on the yearend bonus.

I worked 10-12 hours a week and generally didn't do weekends. Very few fire drills as OP mentioned.

Super fun culture and we'd regularly go out for lunch as a team or drink beers and watch/bet on the game in the office.

Nobody below VP was given any fee allocation on any deal, and fee allocations were a goddamn nightmare. It was like watching a bunch of hyaenas around a caracass whenever a fee was being allocated amongst S&T,  ER, and IB.

VP and above were on flat $100k salaries. Eat what you kill. My director was earning c. 150k / Q when I left in bonus and my MD slightly higher. Things were also going very well at this stage, so comp was not great. but comp per hour worked was. 

We did get B warrants and occasionally options/stock as part of our deals. That was another upside lever. I know the guys have made literal millions on these. Compliance would also let you participate on deals on occasion. One of my good friends from that firm became a millionaire doing this. 

All I wanted to pop by and say is don't apply to regional boutiques expecting them all to pay out the ass like OP did - 630k at associate 2 is insane. If I was OP I would never leave. It's also weird to me that they were letting him source deals as a junior associate.

May 21, 2021 - 1:15pm

"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.

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