WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (78)

  • Analyst 1 in Other
May 29, 2020 - 2:21am

Asking cause there's a huge lack of data post-associate. What do salaries/bonuses look like for public finance VPs/Directors/MDs at bulge brackets?

May 29, 2020 - 11:02am

VP total comp estimating about $350k, Directors and MD are harder to say as it depends highly on results, but rough estimates I would say D in the +$500k range and MD +$750k range

May 29, 2020 - 5:06pm
joylineee:

VP total comp estimating about $350k, Directors and MD are harder to say as it depends highly on results, but rough estimates I would say D in the +$500k range and MD +$750k range

That sounds super high. Maybe at a top BB in a PF Healthcare group since the takedowns in HC are larger, but no way a VP who just covers GOs making 2 bucks a bond is pulling 350k. How can you afford to pay someone the same as corporate IB when the fees are 20x less?

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
Most Helpful
May 31, 2020 - 11:17am

How is that "super high"? The defensiveness in your response is clearly that freak out moment when you realize other industries/groups/banks pay equal to traditional IB and that WSO is a circle-jerk of misinformation outside of TMT/M&A.

While admittedly triggered, that type of response is a huge problem on this forum. It is also why turnover is so high in an industry where plenty of high paying and competitive jobs get overlooked because the tone is "no f'n way! Not the most coveted IB>PE role??? Can't be making any $$$!?"

Use half an ounce of humility and common sense. PF sits under the IB/Markets side of all BB investment banks. It is FO client facing role with a $3 tn dollar market covering the largest government issuers of debt. If anything, these numbers are low. What did you expect? Banks are somehow supposed to attract talented individuals to deal with debt managers/investors/CEOs/CFOs/Mayors/Senators and pay them fractions of what their corporate friends make because some of the bonds they issue are tax-exempt? Yeah, no.

Let's spin your example: 350K for a VP. Your logic is what? You are supposed to pay him 250K? marginally more than a 2nd/3rd year corp analyst for 5+ more years of FO banking experience...? How does that make any sense?

  • Analyst 1 in IB - Gen
Jun 7, 2020 - 2:35pm

Compared to your peers in Corporate IBD, how big would you say the discount is? Assuming $350k for a VP in PubFin could you give a comparison to how much a general coverage group VP would make? Interested in both PubFin and corporate (in different ways), so trying to figure out what the comp differential would be approx if I picked one path vs the other.

Thanks for doing this AMA!

May 29, 2020 - 11:08am

Hours are better, analysts I would say depending on the firm, range about 60-70 hr on average but of course it has its good and bad weeks. In terms of the work, I think more quantitative skills are required because unlike corporate debt, municipal debt can be structured (often is) up and down the entire curve solving against revenue constraints and an issuer's desired debt service. Also, if you like public policy, you will learn a lot about now state and local governments work. Finally, depending on the types of deals and issuers you cover, it could be exciting and mentally challenging (from an exercise your brain perspective) even after many years - particularly in the current environment when governments are trying to figure out how best to navigate the financial impact of COVID-19.

In terms of life style, let's just say I think it is a good balance of making a very decent living and having time to enjoy it.

May 29, 2020 - 11:14am

It depends on where you are in your career when you exit, I know analysts and associates who left for tech, hedge funds, etc. as they are still early enough in their careers but have been told that the experience they gained in PF with dealing with clients and critical thinking has helped him make the transition easier (whether that is true or not I am not sure but make sense to me). Those later in their careers usually go into government or in another role within the industry (credit, insurance, etc), but I think those who have been there long enough have a decent nest egg saved up so not necessarily motivated primary by money if they leave.

  • Analyst 1 in IB - Gen
May 29, 2020 - 2:35pm

Would you say there's a solid number of HF's and opportunities for those leaving PubFin to go to Muni HF? In other words, those that went to HF's would you say that was more of an anomaly or a highly realistic exit (assuming you're a great analyst of course at a strong firm).

  • Prospect in CorpFin
May 29, 2020 - 7:33am

What are some skills that are specifically valued in Public Finance (i.e good powerpoint, writing, excel and others) ?

May 29, 2020 - 11:19am

I think all of the skills needed to be successful in most finance jobs are needed. We spend a lot of time responding to RFP (because it's government and many have procurement rules) so MS Office skills (Word, Excel, and PPT) are a must (if you don't know it, you will learn it fast). Then also it helps a lot to be quantitatively incline, as there is a lot of modeling involved. But I think some of the most important qualities are the ability to look at the big picture, and work as a team player. Junior resources are strained at many BB firms so a non-team player will be exposed fairly easily.

May 29, 2020 - 11:23am

Munis like many asset classes experienced a lot of volatility during this period, and many deals are still on the side lines (more because rates and spreads aren't where they need to be to get the deal done, and lower, "more challenged" credits face more uncertainty). But while volume has declined, things are stable now. In PF with a BB you don't really have to worry that will be no business, because we are here to help issuers navigate through uncertain times. Capital means a lot when markets are volatile, that is why BB firms in PF are fine and will have a lot of business.

May 29, 2020 - 11:27am

For the first part, see above. On your second question, with BB firms there are a lot of opportunities to move laterally within the firm. PF encompasses not only investment banking, but also S&T, credit analysis, derivatives and other cap market structures, P3, direct lending, etc.

  • Analyst 1 in IB - Gen
May 29, 2020 - 7:31pm

Do you see a lot of PubFin to S&T? Seems like Munis S&T is super interesting, and I've hear it's very high paid as well since you're allowed to legally prop trade munis

May 29, 2020 - 6:06pm

As an intern, depending on the firm, you may have access to the Ds and MDs, but you will mainly be working with the Analysts and Associates. So those are the folks that will opine on your performance and whether they believe you are a good fit for a FT position after internship. So I think the best interns I have seen are the ones that are proactive, always asking how they can help, have good communication (in terms of what you have on your plate, priorities, etc.), and generally strive to make the Analysts and Associates look good. One of the biggest challenges at BB firms from my experience is for jr bankers to balance a lot of different things on their plates, so the more you can help them get through their day the more favorably you will be viewed. But that is just my opinion based on what I've seen.

May 29, 2020 - 6:07pm

I am not aware of any recent laterals at the VP and above levels, but I wouldn't imagine that WFH has any meaningful impact. Folks that get hired at that level aren't evaluate on how much work product they can generate, but whether they have existing relationships and ability to grow the business.

  • Analyst 1 in IB - Gen
May 29, 2020 - 1:41pm

Would you say public finance "pigeonholes" you at the bank at the analyst level? I've heard this but don't know the validity of it.

Say, after 2 years if you decide you want to switch to the corporate side, have you seen analyst go into corporate IB from Public Finance IB? And if so, has this been mainly internal lateraling or leaving the firm/going MBA to do so?

Thanks for the AMA.

May 29, 2020 - 6:12pm

I think the perception that you are "pigeon holed" in munis is because there are many who entered PF without having much interest in public policy. Also, any job that pays less than what you make in IB is viewed as not a move up, but in reality if you are indeed interest in the public sector and later decide to leave the bank and want to be the Finance Director at XYZ county or school district, you can certainly do that. So people do move around. But like any other job, if you get too far into your career, say want to go from marketing to becoming a programmer, of course it will be much harder (but doesn't mean it had anything to do with your first job being a "pigeon hole").

  • Analyst 1 in IB - Gen
May 29, 2020 - 7:28pm

Got it, thanks for the clarification. Based on your response to someone else regarding comp though, you said VPs are in the $350k range and Directors are in the $500k range. Isn't that generally in line with IB comp? Or is the discrepancy just for analyst pay? Lets assume the firm is a BB that is top 5/6 in the league tables for the comp discussion.

I'll be entering PubFin, and enjoy learning about the public sector but think longer term I am more interested in the private sector. Would you say after 2 years in PubFin, lateraling into a corporate IB seat (M&A, LevFin, Coverage), would be realistic, assuming a job well done as an analyst of course.

May 29, 2020 - 2:00pm

Do you anticipate further consolidation in the industry? I've been in public finance for three years and the first firm I worked for was acquired (small boutique), and then I moved to a middle market bank with a large balance sheet but lean public finance group.

Would it be beneficial to keep "moving up" to larger companies or will middle market firms be around for the long haul?

May 29, 2020 - 6:18pm

I think when the 2008 financial crisis hit many people thought the smaller firms won't survive or there isn't much incentive for them to stay in the business, but while some did consolidate or gone away many did stay around. Notably, its not just balance sheet, even a big firm like UBS, who was the top firm in the space at the time, blew out their PF department because the Swiss simply don't understand the business and wasn't critical to their overall business. Then the BABs were introduced and money was to be made and incentivize firms of all sizes to stick around. But given the additional regulations around PF in recent years, I do think its hard for small boutique to even medium size firms to operation. That is why you've seen firms like S&Y, De La Rosa, etc. all get absorbed. So the bottom line is I don't think consolidation will stop but many have already done so. As for whether its beneficial to move up to larger company, I always think at the lower ranks you always want to be at the top firms for job security reasons. They have the ability to take financial hits, more spread out in terms of operations, and have more resources.

  • Intern in Other
May 29, 2020 - 7:05pm

What kind of government/public sector roles, if any, have you seen people exit to after working in PF? Thanks!

May 29, 2020 - 8:13pm

I have known of people leave for debt management and other finance functions at local governments such as utilities, airports, universities, school district, cities, counties, etc. Mostly larger municipalities where they issue frequently, so makes sense to hire someone familiar with debt.

  • Anonymous Monkey's picture
  • Anonymous Monkey
  • Rank: Chimp
May 29, 2020 - 7:17pm

Currently headed to HC PF at a decent MM (Stifel, RJ, Piper). How easy would it be to lateral to a corporate IB job for FT, and how applicable would my experience be?

May 29, 2020 - 8:31pm

I am not familiar with how the MM firms operate internally, but I can tell you that a couple of the BB I have been with have excellent internal mobility programs. I personally have not utilized it but I have heard of a few who found other positions within the bank through these programs (but none were to the corporate side). That said, I did know of a person in my training class many moons ago that left HC PF and went to corporate, but that was when he was a 1st year Associate. So that is the long way of saying, it's not common but I am sure it happens depending on the persons specific situation.

Also, maybe you are already aware but within PF there are corp tax-exempt groups.
Finally, I responded to another person above, I think if your goal is to ultimately enter corporate IB you should try to start there.

May 30, 2020 - 5:59pm

For interviews, I would suggest brushing up on time value of money concepts. Also, be generally aware of where the market is (UST yields, equity indices, what the Fed has done, etc.), and more specific to municipals check out headlines on the bondbuyer.com (its a paid subscription service but some free articles), You can also Google around and given how often much municipalities have been in the news of late, at least get a feel of what is generally affecting local governments.

May 30, 2020 - 6:27pm

Thanks for doing this!

From what I understand, it's that PF deal flow is top heavy and most goes to the large BBs. Is this mainly the result of the regulations and smaller fees in PF or are there other factors that contribute to this?

You mentioned you've worked at some of the BBs, has there been significant cultural differences amongst the groups that you have worked for?

May 31, 2020 - 10:52am

It is true that deal flow is top heavy. The reasons are because the BB are able to offer more services (I.e. direct lending and other balance sheet capabilities, etc), stronger capital available for underwriting (especially in challenging environments), and more of a "total relationship" with these issuers (they usually also have Treasury services, p-cards, etc). So it makes sense for BB to use all their resources and capabilities available to chase the largest deals from largest issuers.

Yes, at large BB there could be significant cultural differences. Some are more team oriented and less of a survival of the fittest mentality, more collaboration across groups, and genuine care and respect for colleagues. Then there are some that are eat what you kill and less concerned with helping each other succeed. But I don't think it's unique to just BB.

May 31, 2020 - 1:33pm

From an issuer's perspective it's mainly about cost of funds, which means tax-exempt debt is usually the best option. But depending on ratios, there have been rare occasions that taxables cost of funding is comparable or even better. Other reasons tax-exempt or taxable may be viewed differently are things like future call optionality, structuring limitations due to preferences from different buyer bases, etc.

All else equal, and it's the same or not costing you much more to borrow taxable, you should do it all day long so you don't have to worry about tax compliance (I.e. arbitrage rebates, spend down requirements, etc.)

  • VP in S&T - FI
Jun 2, 2020 - 12:44am

Thanks for doing this, a lot of good information here. Got a couple of questions for you.

  1. How do issuers decide between doing a competitive and negotiated deal? Seems like most of the competitive stuff is very high quality generic issuers.
  2. What is your opinion on FAs?
  3. Are you involved in any private placement type stuff or direct lending syndication? I know some firms bankers will do both but at others there is a separate group.
  4. I feel like the smaller firms do more "interesting" deals, there is a credit story to understand or unique structural features, etc. I get why the BBs stay away from a lot of this stuff, but I was curious if those type of transactions are more interesting than working on the larger more generic stuff the BBs usually work on.
  5. Where do you think the next big innovation in public finance will be? These last several years there has been all sort of entities that have never issued tax-exempt debt starting to find ways to access the market, what is next?
Jun 5, 2020 - 11:37pm

1) Some issuers believe that competitive sales always gets them the best bid. While it may be true in many cases, that is not always apparent, especially when the market is challenging and having a marketing period is invaluable. Also, the more you depart from a plain vanilla deal, the more it makes sense to do a negotiated sale.

2) Just like bankers, there are good and bad municipal advisors. It depends on the MA and situation, the good ones do pull their weight and add tremendous value.

3) I have done both

4) I have never viewed it that way, because the more complicated the deal is the more an issuer would benefit from turning to a BB with the capital and distribution capabilities. Of course the largest issuers in the country also happens to be those who issue straight forward/ strong credits deals. So it's not surprising that all the BB are after those deals. That said, the BBs I have worked for have all done more than their fair share of interesting deals.

5) That is a good question. From a structuring perspective, the banks always find some ways to tweak existing products and structures to get issuers where they need to be. I don't know what the next big thing will be, but one guess is given how taxable offerings are becoming a larger piece of the market, I can see a bigger push to change how taxable bonds could be more effectively marketed and sold to the international investor community. If you are in muni S&T, you probably know more than I do on that front!

  • Analyst 1 in IB - PubFin
Jun 5, 2020 - 10:49pm

I'm a pubfin analyst at a smaller firm. My impression of analyst life at the bulge brackets was that their analysts get their asses kicked: very rarely do they get off work before 11pm; they're overworked and barely have enough time to sleep because their bosses are asking them to run 10 different scenarios in DBC for 30 issuers each week, along with chasing every refunding under the sun. And submitting 150-page RFP responses.

Can you comment on this? Do you know of any of the larger firms in which analyst/associate life is a little better than that (including RBC, Wells, Jefferies & UBS)?

I got this impression mainly because my firm was a co-manager for a deal with BofA and I got to see a forwarded email chain where the BofA analyst was sending stuff at 2am after his MD requested it at 10pm. That stuff was not necessary at all for the deal and I felt bad for the BofA analyst because he was expected to be online at 10pm and ready to crank shit out ASAP.

I'm trying to compare the bulge bracket analyst life to that of the smaller firms where the hours are quite manageable (but the pay is much less).

Jun 5, 2020 - 11:45pm

I know junior bankers at both small, mid, and BB firms who work a lot of hours. I think it depends on the group you are in and who you work for. I would say on average analysts and associates at BB average 60 hours a week, with some weeks better than others. I have also known those at smaller firms that work a ton, simply because hiring more support comes out of the MD's pocket. At a lot of small firms it's eat what you kill, and if you want more bodies you have to pay. Then there are those at small firms where the MD isn't very productive so they are mostly sitting around responding to RFPs hoping to get deals. So I wouldn't say that there is an absolute correlation between hours and the size of the firm... like with many things, it all depends

Aug 3, 2020 - 2:34am

Do you see Public Finance Investment Banking as a feasible means to transition to Project Finance IB at the junior level? For example, I know most public finance groups have an in-house project finance team that focuses solely on P3's/Project Financing arrangements.

How interchangeable is the skillset between public & project finance? I understand Project Finance, depending on the bank, may focus more on the lending/capital markets side vs. advisory.

If Project Finance is your end goal, would you say the skillset from public finance would be LESS applicable than experience at, let's say, a power/energy/utilities investment banking function?

Apologies for the loaded question - appreciate your help and advice.

Spotify provides a range of investment banking, investment management, and securities services for our clients.

Dance like nobody's paying. Premium is free for the first 30 days.

Sep 29, 2020 - 2:00pm

I am at a BB and we have a project finance team within our department. Over my 3 years here, 3 people on the team left to join project finance groups (sellside/buyside). As for the skill set, its kind of similar, particularly for new construction, as you are trying to reach coverage constraints but the revenue you are sizing from are the difference - in project finance there is more artful forecasting initially (you rely on a feasibility consultant to actually come to market). As for which group is better experience wise, I would say, not knowing much of the corporate side, that being in a power/utilities group is probably better as you are less reliant on DBC but that is an educated approximation.

Dec 6, 2020 - 8:06pm

I know you mentioned that hours range from 60-70 in a given week. Curious about what that looks like in a normal day. Would you say you're coming in around 9am/10am at leaving around 7-9pm?

As a follow up, I've heard pub fin and DCM are great career banker roles due to the lifestyle and having some predictability around your schedule. Do you have any color on what the hours/lifestyle looks like once you hit VP and above?

Lastly, at my BB I know that the pub fin teams are spread across the US and not just centrally located in NY like IB. What are your thoughts on building your career at a regional office(say: Chicago,Dallas,etc)?

Start Discussion

Total Avg Compensation

July 2021 Investment Banking

  • Director/MD (9) $911
  • Vice President (36) $363
  • Associates (209) $232
  • 2nd Year Analyst (120) $152
  • 3rd+ Year Analyst (28) $146
  • Intern/Summer Associate (101) $144
  • 1st Year Analyst (444) $133
  • Intern/Summer Analyst (357) $82