Q&A: Completed Four Years of Banking

I primarily focused on the valuation of private companies for tax, ESOP and financial reporting purposes. I feel like the most valuable skill I developed in the val group were financial modeling and accounting. We built our models different in valuations, however, I understood how to build automated models and structure them appropriately. I had a good modeling foundation which allowed me to quickly learn the structure of models in investment banking.

The valuation skills I developed were not as helpful as I expected. I think the reason for this is because in investment banking we do not scrutinize assumptions as much. Instead, we focus on providing ranges of valuation.

There were multiple reasons why I wanted to make the switch to IB (ordered by priority):

1. I was seeking a position that requires a more analytical skill set. I felt valuations was more technical in nature. In order to meet budgets, we did not do deep dives into industries and business operations. This is pretty common across the entire valuations industry. I felt investment banking offered a great learning opportunity had a more robust diligence process which allowed individuals to learn a large amount about multiple business models and principles. Working in a smaller firm, I also felt that I would get more direct interaction with company management.
2. Pay
3. I wanted to get involved in the transaction process and really understand how deals are structured.
4. I was extremely attracted to distressed banking services because I felt we offered an extreme value add. This was specific to the firm I joined.

-XSX

I networked my way into our valuations group. I met some people within that team and expressed my interest in transitioning. I had the support of my internal audit managers which helped.

-XSX

I left as an associate and my comp was within the range of the associate pay in the WSO industry compensation data ($200-250K).

The salary for the new position is much lower when compared to banking.

My hours as an Associate decreased but by a very small amount. I was probably doing 65-75 hours a week as an associate depending on workload.

We primarily represented lenders in Senior Secured TL and ABL positions. Most of the deals were sourced through existing relationships.

Could you please talk a little bit about what you do on a day-to-day basis in this role? We operated using very lean deal teams. This is something that is more common in smaller banks versus EB/BBs. I would usually spend the first 30 min - 1 hour of my day reviewing emails and reading news, primarily Debtwire. From there, I would knock out any responsibilities I had. I would say my workload was a 60/40 split between modeling and presentation work.

What is your level after 4 years of IB experience? I was an Associate

What is the growth potential at your current firm. We were a very small team that was growing so there were growth opportunities.

Did you work on a lot CPG clients while at your bank? I did not work on any CPG deals during my time in IB.

As an Analyst/Associate, attention to detail and attitude are the two most important traits I believe any junior person should have. Furthermore, in order to grow into more senior roles you need to act professional. Your promotion to VP/Director is based upon how you would represent the firm in front of the client. I have seen numerous analysts not focus on this and it would hurt them in the future for promotions. When senior management perceives you as an immature or unprofessional person, it takes a lot of effort and time to dig yourself out of that hole.

Edit: I would also add strong communication.

(1) How is the type of work different when advising secured vs unsecured lenders vs unsecured committee as a RX Consultant? I understand how the type of work might differ when representing creditor side as an investment banker but trying to figure out what RX Consultants do when representing different creditors. I never advised on that deals that had complex cap structures or numerous unsecured bond holders. I would defer to someone in one of the larger firms such as LAZ or HL for this. I believe UCC work is not as active as representing 1st TL or unsecured bond holders.

(2) How transferrable is the skillset gained if one wants to jump from RX consulting to RX banking? I built a lot of 13-week cash flows in RX consulting and reviewed a lot of 13-week cash flows in my RX banking engagements. Furthermore, you are building turnaround plans in RX consulting and reviewing turnaround plans in RX banking. I think the skills are transferable. If you want to make the move to RX banking, the best time to make it is during your Analyst years. I would not wait long. From what I have seen, most senior RX bankers in the solid shops have been with the firm since their SA or Analyst years.

1) Yes, I completed the CFA while in IB. It was a shit show and never want to experience that ever again. 2) very lean. It would usually be Associate/MD or Analyst/VP/MD. This is not the norm in larger firms. 3) Not as much as I expected. I had a good story for why consumer. 4) Base salary is in-line with avg entry strategy comp, 10-20% bonus and options which vest over time

You being able to balance your time is strictly based on your company's culture. It is also a basic math. There are 168 hours in a week. You work 70-80 hours, sleep 6 hours a day and commute an hour a day which leaves about 40-50 hours for you to spread out. You are going to spend that time on things you prioritize. I prioritized staying healthy, family once a week and nurturing my close friendships. There is going to be a part of your life you are going to neglect because of the lack of time.

If you work weekends, it becomes more difficult because you become really uncomfortable planning things out. Nothing is worse than flaking on a friend because work came up. Once you have support you can trust under you, these things become a little easier. Unfortunately, I never had that luxury.

It was the only job offer I received so I just took it. I was not pushed out of IA. I was close with my managers and they could tell IA did not challenge me mentally. I expressed my interest in transferring to my mentor and he was supportive of the change and thought it was a better fit for my long-term career goals.

I received no push back because of the supportive culture of our firm and that it was an internal transfer. I could be easily replaced in IA given that they were hiring like crazy.