Public Finance Group IBD Exit Opportunities

I have the opportunity to join a top Public Finance Group within the IBD of a bulge bracket. I was wondering what the exit opportunities are of this position?

Also, I have extensive internship experiences in Private Equity and S&T so would Hedge Funds or PE shops be a possibilty after a 2-3 year stint or would I need to get an MBA first?

Thanks gents

 

Okay to be a bit more helpful ... every good public finance guy I know has stuck it out at their bank and done very well. The one's thats left have gone to DCM or another part of IB

are you talking about Muni Finance here? (that's what I was referring to)

 

Thanks for the second response.

Yeah it is Muni Finance. Tax-exempt debt capital raising and advising. It sounds like most of the people you know have ascended the ranks after the analyst program then? I am optimistic about doing the same if it means interesting work and greater opportunity within the bank.

It also sounds like there is some opportunity to lateral if I decide that it isn't right for me after two or three years.

Anyone else have experience in the space or know of other people who do?

 

Morgan Stanley's ex-head of muni-finance ended up running their China JV with CICC. A few of the guy's stayed just because of the solid relationships. I think the kind of work you do in muni finance is quite similar to sovereign / IG DCM work. It's decent work and the credit analysis will help you maybe going over to a hedgie but its definitely no lev fin.

That said, what does get interesting is that SOME muni finance groups will do similar things such as project financing for munis (building new hospitals, blah blah) and that could be cool.

Munifinance sits under FICC at MS so you also get to see some more aspects of theproduct from the sales/trading side as well

It's not a terrible choice by any means but it's not a fast track to PE ...

 

Yeah the work seems really interesting and I think I would fit well with the culture of this particular group.

I know for a fact that they do a lot of project financing as well and I agree that these types of projects would be cool to see from start to finish.

I just wanted to make sure I had some options in case I decide to pursue other avenues after an analyst program.

I really appreciate the input and perspective on the space. I take it you work/have worked in capital markets to some extent?

 

I'm in ECM currently and considered / have experience in both DCM / ECM but as you get more senior, the DCM space is really not condusive to ... getting paid lol.

DCM will forever be relegated to a "support" space for the main lines of business that the bank does.

Also, DCM after a while can get boring. Only thing that matter is

1) Credit 2) Value of underlying assets securing the debt / whatever with consideration of the credit above

The work you do is really debt schedule, some DCF, and credit comps and that's about it. In the case of munis, the credit is really severely limited to a certain range, i mean i've yet to see a high yield muni issuance

After that, the investment story, etc don't matter. Of course figuring out the "credit" or strucutring something to fit the credit profile is very important and useful for PE but thats mainly lev fin etc and nto so much in public / muni finance.

I have spoken at lenghts with people from MS and Bear muni-finance - 2 of the best houses back in the day and all very smart people you work with

 

I'm definitely not enjoying my time here. Partly because I feel like my hopes of working in high finance are slowly fading away but mainly because the office environment is really bad - analysts aren't treated well, high attrition rate, etc.

The losing hope part has more to do with that fact that I've been doing everything right in the interviews, I have all the right answers, I nail the technicals, I've made it to the final round at every firm I've interviewed with. So, I just don't know what more I could be doing, and if there isn't anything, i.e. if it really is this hard to lateral from public finance, then perhaps I should focus on other things (try and move up here / b-school).

 

You should really ask yourself why you want to leave Pub Fin and jump into "traditional IB". It really sounds like you haven't even given your current job a chance. Don't get me wrong here...I'm not trying to sway you either way. But it's been my experience that analysts are quick to jump ship before they even know if they like a job. I'll be honest - your exits really depend on what you are actually doing. If you're a G.O. analyst you will find it tough to jump to "traditional IB". If you cover Healthcare and have worked on substantial deals you can make a solid argument. If you're in transport/utilities you have a solid case for AM (same for GO). And if you cover P-3s you can even swing infra-PE. But as I said...don't jump because you're ashamed of being in Public Finance or because you want to tell people you build LBOs. I've built way more technical models than the majority of my friends in traditional IB, and I work in Pub Fin.

Think of it this way - you get set up on a blind date and she's a solid 7. But all your friends show up with 8's and 9's. Do you immediately assume they have it better? No sir because that 7 may rock your world while your boys are dying from blue balls.

Point is - give it your all and make sure you don't like it before you throw in the towel. I've seen disenchanted analysts get the boot with no where to go while eager guys/girls get promoted or helped into more desirable positions.

 

Definitely agree with the last bit. My performance has been suffering, but I simply don't like what I do, and I'm finding it extremely hard to motivate myself. I do think I've given this line of work a shot, but it's not for me. One of the major appeals of IB to me was that it opens up doors for you, whereas here, I feel like most people either stay in pub fin or they just fade away. At this point, the only way out seems to be b-school.

Most of my deal experience has been with GOs, so there's that. Do you know anyone that has made the jump from pub fin to a more traditional group? I really want to figure out what my options are at this point, so I can start focusing on one thing, rather than waste my time on something that is unlikely to work out.

 
net shaker:

You should really ask yourself why you want to leave Pub Fin and jump into "traditional IB". It really sounds like you haven't even given your current job a chance. Don't get me wrong here...I'm not trying to sway you either way. But it's been my experience that analysts are quick to jump ship before they even know if they like a job. I'll be honest - your exits really depend on what you are actually doing. If you're a G.O. analyst you will find it tough to jump to "traditional IB". If you cover Healthcare and have worked on substantial deals you can make a solid argument. If you're in transport/utilities you have a solid case for AM (same for GO). And if you cover P-3s you can even swing infra-PE. But as I said...don't jump because you're ashamed of being in Public Finance or because you want to tell people you build LBOs. I've built way more technical models than the majority of my friends in traditional IB, and I work in Pub Fin.

Think of it this way - you get set up on a blind date and she's a solid 7. But all your friends show up with 8's and 9's. Do you immediately assume they have it better? No sir because that 7 may rock your world while your boys are dying from blue balls.

Point is - give it your all and make sure you don't like it before you throw in the towel. I've seen disenchanted analysts get the boot with no where to go while eager guys/girls get promoted or helped into more desirable positions.

Really good points! Can I ask which group are you in? What kind of modeling have you been doing? I do a lot modeling for 501c3 which I enjoy the most.
 

Mistmaker: Networking + Good Interview + Good Recs = Job in M&A

You are a year into a job you don't like and you haven't successfully made the jump. So what? Suck it up, perform, and devote every spare hour to reaching out to alums and preparing for your interviews. Make sure your fellow analysts, assocs and vps will give you a good reference. Please don't underestimate the importance of a good referral. You have plenty of time to transition from PF to M&A. Seriously, you could work the next five years in PF and still transition to M&A if you network the right way.

Don't get discouraged. Go watch something inspirational and listen to Macklemore. Pick yourself up and get back to trying. It's time to make it rain.

Quid Spucatum Tauri Est? Illegitimi Non Carborundum.
 

Nikao, as I'm sure you know, recruiting while you're working banking hours is pretty draining. Plus, it also affects your performance at work. For example, when I had a lot of interviews lined up - I spent a lot of time doing phone interviewers and then leaving the office in the middle of the day for final rounds. Still, I'm sure I would get good recs if I were to leave. The issue with M&A roles has been modeling experience and I don't know how to get around that. I'm not sure self-taught modeling would help me land a role at a top shop. I think my best bet would be to try for DCM roles.

 

Mistmaker:

If you are concerned about getting into a top shop, then there may be something to your concern about lack of modeling experience but I kind of doubt it. If you can swing a good job in DCM, maybe it isn't a bad option but is DCM how you want to spend your time?

Confidence The big thing that is coming through in your posts is a lack of confidence and a general feeling like you have been beat down. I'm picking up on this through the net, so my question to you: are you confident in your interviews? I don't mean a false confidence, either. I am talking about a genuine belief that you are good at modeling financials and capable of filling in the gaps once you are on the job; a health ego is a good thing. You might not be getting offers because you aren't coming across as confident. I'm obviously speculating, but at least consider if this might be part of it. Are your shoulders rolled back? Firm handshake? Crisp responses with good eye contact and generally strong bearing and confidence in manner and dress? Confidence is important for both men and women.

You have lots of options and you don't have to know everything to get the job, but please don't give up because it is hard. That is a path for weak people. If M&A is what you want, make it happen. You might not end up at Goldman, but you can find a job somewhere doing what you want. Later, get an MBA and get an associate job at Goldman.

Quid Spucatum Tauri Est? Illegitimi Non Carborundum.
 

Thanks for the encouragement man, appreciate it. As far as I can tell, I usually do pretty well in interviewers, in terms of having the answers, appearing confident and all that good stuff. But who knows, people usually aren't too inclined to provide feedback after rejecting you, so I could be way off.

I'll try and persist, although it's tough, especially since recruiting was pretty brutal even when I was in school, and having to do this all over again is a bit demoralizing.

In terms of DCM, do you have any advice on how to go about finding folks that work in those groups? I haven't had much luck on linkedin, since most people don't seem to list their specific groups on their profiles.

 

Fuck bschool, and fuck the fucking Diaz brothers..

One man's 7 is another man's 4.

Your issue is you're twice a loser since you're from a MM firm AND in public finance. If you were at MS or GS pubfin, atleast you'd have the brand going for you... it still wouldn't be easy by any means, but you'd be better off than you are now. The skills you're learning are not very transferable. Don't circle jerk trying to validate Wall Street's lame idea of 'what it takes' to get into PE (if that's what you mean by opening doors and high finance)... or even if its not and you just want to do M&A long term. People with less going for themselves have done more. I've met more than a few people that graduated from complete non-targets that ended up in similarly dead end situations and realized they needed to get somewhere else in prder to realize their goals. They hustled and got after it and ended up lateralling to some of the most competitive groups on Wall Street. All it really takes is hunger and drive and persistence. Stick to it. Keep adapting. Failure is a statistical destiny, it's bound to happen and the more you do it (assuming you're not a complete fucking retard) the more likely you are to succeed the next time.

The one piece of advice I will give you.... is in final round interviews they've already checked the qualified box. At that point it's all about polish, personality and differentiating yourself from the pack. Are you as polished as you can be? Are you coming off as personable? And are you exuding some unique attribute that separates you from everyone else (hunger and drive are the biggest ones)? Also, make sure you're not betraying how miserable you are in pubfin. Spin it.

The fact that you are (a) getting interviews and (b) getting to the final round means that you're every bit as qualified as the next candidate and you're falling short in the interview process somehow. Bschool is not going to solve that.

And neither is fucking a 4.

 
Best Response

First of all, municipal finance IS considered "high finance" unless you're working for a county government in the accounting and finance department. I'm not sure what people's definition of "high finance" is but it's grotesquely misleading to assert that only investment banking or private equity are considered "high finance" when their share of the financial markets is nearly infinitesimal. Second of all, I started out in municipal finance at an MM. Our formal training program was 2 months long, intense, and modeling heavy. I learned VBA during my gig in municipal finance--yes, low grade computer programming! I'm blown away that people here are claiming there aren't transferrable modeling skills in municipal finance. The principles of financial modeling are universal--it's just embarrassingly simple mathematics and Excel! Modeling other transactions just requires learning the specifics of that model. It's not rocket science, for God's sake! (The puffery of some young people is mind numbing sometimes.) Finally, the bond market is FAR bigger than the equities market and much more fundamental and important to the overall economy. There are an enormous number of careers and opportunities directly or indirectly associated with the bond market.

But beyond dispelling all the insanity in this thread, you're in a great spot. You've come from a target university and you're already working in "high finance" with a company that, while not PIMCO or Goldman Sachs, presumably has a recognizable name in the industry. If you truly want to continue working in high finance generically then you're almost required to get an MBA--this should just be assumed for anyone in high skilled financial services. Stop spending your time looking for another job and kick ass where you're at, attend an M7 business school and participate in OCR and you'll land in a role of your choosing. It's really that simple. This isn't rocket science--the path I just laid out has been beaten down by hundreds of thousands of people before you. You know exactly what to do--perform well at your current job, attend a top business school, and participate actively in on-campus recruiting. Done.

 

I have my reasons for not considering this "high finance" but in the bigger scheme of things, they are probably trivial and I should just be happy to be in the position I'm in.

I agree with everything you've said and plan on taking that route (MBA). Just out of curiosity, is that the route you took? If so, what sort of role are you in now?

 

Any thoughts on Raymond James Pub Fin group? I got an offer for their New York City office. Is it true that people in Pub Fin stay for a long time? ..Seems like I will be doing cool work with nonprofit/public sector clients in terms of advisory and debt underwriting. What is the earning potential like the higher up you go? Thnx

 
efda1:

Any thoughts on Raymond James Pub Fin group? I got an offer for their New York City office. Is it true that people in Pub Fin stay for a long time? ..Seems like I will be doing cool work with nonprofit/public sector clients in terms of advisory and debt underwriting. What is the earning potential like the higher up you go? Thnx

I have a good friend there, and seems like their culture is much better than my previous firm, a comparable MM with stronger corporate banking capabilities. Decent deal flow. But compared to other sectors, public finance is shrinking faster and experiencing more spread compression. It's hard to break into buy side, but certainly possible and I made the transition. I have seen people go to b school after few years in pub fin and move to corporate banking or buyside thereafter.

 
giwook:

Not to hijack this thread or anything, but what would be considered some of the top banks/groups in pub finance? How does BAML rank in this list?

By far #1. After that it is close between Citi, JPM. After those 3 you have shops like MS, Barclays, GS, RBC, etc. Regionally Baird is good and there are probably some more.

This to all my hatin' folks seeing me getting guac right now..
 

Anyone have info on RBC's Municipal Finance group? I eventually want to work in international development in some capacity probably in development management. Would PubFin be a good place to begin this sort of career trajectory?

 

Just remember, no matter how prestigious your job title, or how much bonus you get in year end, there will always be people with more prestigious jobs making more money than you. Just make sure the choice you make will make you happy. You don't want to take a harder job, that you hate even more, and still be miserable comparing yourself to more successful people.

 

pretty limited. non-profits and certain government agencies, maybe, but you could probably stand a better chance of getting such jobs through a non-IBD background. For PE, it really depends on the type of fund. an infrastructure fund might value this skill, but this is a fairly narrow subset of the total PE funds out there.

Pub Fin is basically debt capital markets for non-profit-companies. It's a pretty narrow skillset. I can't imagine the Fed would value this experience too much.

its really important to know what you're getting into with Pub Fin groups. Not bad if you want to do it, but realize its very different from traditional corporoate finance and investment banking (also bonuses tend to be less)

 

Well, calling the site stupid implies that the people who use it are also equal to that characterization. Asking said people for help implies that you know less that the stupid people on the stupid site. Therefore if you want any advice or friends for that matter i would advice that you learn to choose your words carefully. SO with regards to your Question.............................................................................................

All things are possible with Him i have to deal
 

The only guy I know in Public Finance is trying to use the BB name to leverage himself another position...the ops are terrible from what I hear.

"Everyone has a plan until they get punched in the face."
 

Hopefully someone that works or has worked in pubfin will chime in, but I will share what I learned form the guy I spoke with during an info session. He said people will either stay in muni finance or lateral to another group within IBD, usually something within DCM. He did not give the impression that exit opps were bountiful. In terms of exiting to PE I would imagine there are much better groups to be in within IBD. Again, this is just anecdotal so please someone shoot me down if wrong or confirm if correct.

 

There aren't many exit ops to the PE world and the smoothest transition to the buyside is via a MBA. Also, municipal finance is ironically a pretty tough industry to get into. There are really only a few real players out there - guys like Citi, JPM, etc... Outside the top 4 or 5, there is almost nothing going on since non-American banks don't play in the space and non-mega banks don't have a true distribution network...

Muni world is also somewhat unravelling these days - I would personally stay away from the industry. I used to work in munis and still feel like there are too many red flags in the space.

 

so are there any worthwhile skills that I'll learn in Muni Finance that I won't learn in a regular IB position?

 
peinvestor2012:
I would guess muni, sovereign or public funds are your best bet. Fixed income funds may be a secondary target, but they should have a big holding percentage in public debt.

You will struggle to get into a HF with that type of experience. Modeling & analysis in pub fin isn't nearly as detailed.

That is what I was thinking as well (unfortunately). But do you or anyone else think that experience combined with MSF or equiv would help? Plus CFA as well?

I'm just trying to map out how if I have a position in Pub Fin that I could manage to change direction after a few years.

"History doesn't repeat itself, but it does rhyme."
 

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"History doesn't repeat itself, but it does rhyme."

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