Q&A: Former Business Valuations Associate (BO->Val->Corp Dev)

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Maybe its just me (since I have selective reading, could very well be true) but when accounting firms and different groups within accounting firms are brought up "Business Valuations" is always asked about. So I thought would do a Q&A on the mysterious world of Business Valuations. Here's a quick rundown of my background: Graduated semi-target state school>>>Back Office (Funds Accounting) at a BB>>>Independent Valuations Firm>>>Valuations group within accounting firm (BDO/McGladrey/GT)>>>Corp Dev. I have about three years of experience within business valuations from both the independent/boutique side and the accounting firm side so I can speak to my experiences at both (recruiting, type of work, exits etc). I know there are a lot of people who are also trying to move from BO positions to front office type roles, to which I can also expand on. I have just recently moved to Corporate Development (M&A) so I'm not I can speak too much upon the work yet (only one deal so far, but I can try) but I can definitely speak upon the recruiting process. Ask away.

Comments (53)

 
Nov 5, 2014 - 11:49am
Glad to see you post this. Thanks man! I spent time in corporate finance and just came to a boutique valuations firm myself. Where you valuing businesses or physical assets at the boutique firm? How and why did you make the transition to the accounting firm? Did you consider going somewhere like Duff & Phelps?? Are you able to shed any light on comp at these different stops? Thanks!
 
Nov 5, 2014 - 12:01pm
Eskimo Brothers:

Glad to see you post this. Thanks man!

I spent time in corporate finance and just came to a boutique valuations firm myself. Where you valuing businesses or physical assets at the boutique firm? How and why did you make the transition to the accounting firm? Did you consider going somewhere like Duff & Phelps??

Are you able to shed any light on comp at these different stops? Thanks!

I did not value any physical assets (fixed assets, real property, real estate etc.), there is usually a separate group dedicated to valuing those. I transitioned to an accounting firm mainly due to the situation I was in - uncertainty with upper management, it wasn't ideal (since I was trying to move into an M&A role) but more of a place holder. I did consider places like Duff & Phelps when I was trying to get out of BO but didn't really revisit them since I didn't have too much luck my first go around. I liked D&P since they had an I Banking arm but I think their recruiting is pretty strict and hire out of school for most of their analysts/associates (at least for ibank but could be wrong). I'm not too sure what the comps at the different shops are - I think glass door is your friend in this instance but I'd suspect big 4 would offer the highest comp (maybe a shop like D&P or BVA offering comparable or even higher).
 
Nov 5, 2014 - 1:02pm
BankerC159:
Eskimo Brothers:

Glad to see you post this. Thanks man!

I spent time in corporate finance and just came to a boutique valuations firm myself. Where you valuing businesses or physical assets at the boutique firm? How and why did you make the transition to the accounting firm? Did you consider going somewhere like Duff & Phelps??

Are you able to shed any light on comp at these different stops? Thanks!

I did not value any physical assets (fixed assets, real property, real estate etc.), there is usually a separate group dedicated to valuing those.

I transitioned to an accounting firm mainly due to the situation I was in - uncertainty with upper management, it wasn't ideal (since I was trying to move into an M&A role) but more of a place holder.

I did consider places like Duff & Phelps when I was trying to get out of BO but didn't really revisit them since I didn't have too much luck my first go around. I liked D&P since they had an I Banking arm but I think their recruiting is pretty strict and hire out of school for most of their analysts/associates (at least for ibank but could be wrong).

I'm not too sure what the comps at the different shops are - I think glass door is your friend in this instance but I'd suspect big 4 would offer the highest comp (maybe a shop like D&P or BVA offering comparable or even higher).

I gotcha. I'm valuing physical assets right now so that's why I asked. I think one of the reasons that valuations jobs aren't talked a lot about here is because of the lack of compensation data points. Being completely new to the industry myself, I don't have a clue outside of what I make. If anyone has any data points to add it would be much appreciated!
 
Nov 5, 2014 - 12:20pm
gobucks6:

What are your thoughts on how the various independent shops (Valuation Research, Duff & Phelps, and Stout Risius Ross, specifically) are viewed across the Street?

Hmmm.... Interesting question. I've ran into all those firms at some point. I don't think Valuation firms get very much respect from any Wall Street bank. I think there are a lot of good skills that you can pick up from business valuations that can be translated to banking but the fact of the matter the work done for business valuations is usually for financial reporting/tax (outside of fairness opinion/solvency). With that said I would say D&P has probably the most name recognition nationally. If you're end goal is ibanking - not sure that business valuations will really help you too much as a resume builder.
 
Nov 5, 2014 - 1:35pm
betaa:

Thanks for doing this.
Are skills you gained transferable to your new role in corp dev? Also, how was your interview process like?
Day in the life for both roles(valuations, corp dev) would be appreciated!

There are a bunch of skills specifically when it comes to modeling and finance/accounting that you will pick up from valuations that has helped me with my current role. In valuations you use a DCF on pretty much any project you touch and you will also use GPC method quite a bit as well (exposure to market multiples). Also, you tend to pick up quite a bit of technical aspects of finance in accounting in valuations due to the nature of the position and the scrutiny put on valuations from auditors/IRS. When you are speaking on interview process, I assume at my current Corp Dev position - so I will speak upon that. I applied online, then had a phone interview. Phone interview was with the Director of M&A - pretty basic technical questions (how to find free cash flow and some basic corp finc questions) and some qualitative questions (nothing that hasn't been hashed out a million times on this website). From there I was brought in for about a 4 hour interview meeting with both the M&A and strategy teams. This time the questions were more case study type questions (questions about market sizing, revenue drivers etc). Which was pretty difficult since I was not prepared for this in the least bit. Thought I failed the interview miserably - but got a call on the way home telling me they were going to send an offer. I was pleasantly surprised. One thing to note about interviews for these types of roles is there is no standard type of interview process as I've interviewed for a handful of these positions and they were all different. So gaining insight into the hiring managers background may give you insight into the type of interview you will get (hardcore banking background - probably an interview similar to an ibank interview). As for a day in the life - for both roles its hard to say since its really fluid, but i'll give it my best shot: Valuations: 9:00 - 9:30 - Arrive at Office 9:30 - Go over any outstanding audits that need to be done for the audit team and external projects that I may have. 10:00 - Go talk to MD/Director/Partner check in and status of existing projects/audits and any new projects that maybe coming in. 10:30 - Work on said audits/projects 12:00 - Lunch 1:00 - Continue signing off on audits or working through external projects. 5:00 - 6:00 - Leave office Pretty vague but its pretty project orientated so it just really depends on the day. During Audit season I would be stuck in the office until 2-3am at times, while when its really light I may just work from home. That was a good thing about working at the accounting firm I did was the flexibility to work from home and basically come and go as you please as long as your work was getting done (this could also be reflective of your boss as well so maybe different for other offices) Corp Dev: 8:30 - 9:00 - Arrive at office 9:00 - Read over financial news - specifically in my industry 9:30 - 10:00 - check in with my director for status on current deals. 10:00 - Work on update or modeling new intricacies of the deal 12:00 - Lunch 1:00 - 5:00 - Continue working on models/meetings with director or business unit leaders for more insight/calls with bankers/more tweaking/ gaining better understanding of industry and models used by the company/put together decks for business unit leaders 5:00 - 6:00 - Leave office I'm in the office much more in my current role but nothing crazy. Work/life balance so far is really good, I'll need to revisit this as a deal starts to heat up.
 
Best Response
Nov 5, 2014 - 2:10pm
Nice thread. Ex big 4 vals myself. I actually found it quite a nice job. Good work-life balance, they pay you enough to live well enough on and you pick up very solid technical valuation skills. You also develop good communication skills from presenting ideas to auditor or writing reports for clients so overall not a bad number. I should note that I was outside a major London/NYC type market but some colleagues in the UK team made some nice jumps (2 to PE and 1 to a solid strategy role with a FTSE). Comes back to accountants being more accepted in the UK as opposed to the US. I ultimately left because it just was not that stimulating (and the pay is poor in comparison to other areas of finance). As BankerC alluded to a lot of the work is for financial reporting purposes and a lot of the time you are providing more of a technical valuation than a real commercial one hence the lack of respect. Day in the life: 8.50 – Arrive in office, catch up on business news, shoot the shit with colleagues for a bit, work through emails 9.30 – Work on a goodwill impairment memo for the audit team. The team is performing the annual audit for a massive global tech company. The tech company has subsidiary’s all over Europe and the audit guys need to make sure they are recorded on the books at fair value. The tech company will have done up their own valuation of the subsidiaries but we need to review it. First thing I need to check is the WACC. I research broker notes to come up with a solid peer list and build a WACC from scratch. I pull information on tax rates and bond yields from Bloomberg and try to get a bond from a comparable company to proxy the cost of debt. I work out the Beta using the comps I have pulled and in-house software. 11.30 – Now that I have my WACC I start reviewing the methodology. They have used DCF to value so I need to check the methodology has been applied appropriately. Have they calculated FCF correctly, is mid period discounting applicable, what impact does it have if I tweak the assumed growth rates. I will build my own mini-model to test these assumptions and for use in the memo I will prepare later. 12.30 – 1.00 – Lunch, canteen with colleagues or go outside for something. One of the benefits of Big 4 is that there are always lots of people at your level with similar interests so always easy to find somebody. 1.00 – Start writing impairment memo. A lot of the time these can be rolled forward as the audit happens every year…so does our val review. I include a brief description of the business and what we have been tasked to review by the audit team and then write overviews on the WACC, Methodology and terminal value calculation used. It all seems reasonable and I include a section with my sensitivities to show the impact. Send off to my Director for review before it goes to Partner for sign off and is sent to audit team 2.00 – Me and my manager sit down for 30 minutes to discuss a valuation for a stockbroker we are working on. The founders are looking to exit the business so they are looking for us to do a valuation to give to tax authorities. This means we have to value the business as of today but also in 1973 as this is when the period starts for Capital Appreciation Tax. We have decided that a market based approach is most appropriate but finding good comps is a bitch! This is a small enough job but it is also a tricky one. We decide on an approach and I agree to work on it tomorrow 2.30 – An email comes in from a major PLC we are working for. We are conducting a Purchase Price Allocation (PPA). This is where a company buys another company and for accounting purposes the consideration needs to be split between the assets acquired and goodwill. This is a big job. We have already built a model from scratch which values the various intangible assets of the business. Meanwhile our capital equipment team (the nerds of the valuation world which makes them pretty fvcking nerdy) values the tangible assets i.e. machinery and plant etc. I run the updated numbers through our model and discuss the impact with the manager. Ultimately we will write an 8- page report on this outlining the nature of the transaction and the valuation of various parts of the business and how much goodwill should be applied. This is interesting, relevant work but again the end point is a line on the balance sheet. 4.30 – Meeting with an audit team who are auditing a hedge fund. The fund has a number of illiquid positions that the audit team want our input on. We run through the positions and what’s involved. The company has a position in debt of an insolvent telecoms firm and a coal miner in Indonesia. The rationale provided by the fund for the valuation seems pretty flimsy so there will be some back and forth on this one. Ultimately in cases like this the audit team manage the relationship which is a bit shit. 5.30 – Set up a call for tomorrow with the PLC we are doing the PPA for to discuss where we are with it and what additional information is required 5.45 - Grr, somebody is annoying me about a compliance checklist that is overdue. Two thoughts strike me 1) why am I here at 5.45? I am usually out at 5.30….I did not sign up for banking hours! 2) I fvcking despise the amount of admin bullshit that exists in Big 4 6.00 – I email the checklist on and bolt for the door. There should be some late nights as we get closer to the PPA deadline (as it turns out one night I have to stay until 9pm! I have to drink 4 cups of coffee the next day to function…nearly an all nighter!) As mentioned I was in a regional office so hours were light. In London count on longer hours (prob leave on average at around 7 and a late night would be 11-12) but count on better quality work in general.
 
Nov 5, 2014 - 2:19pm
Thanks for doing this. Got 3 questions for you: As someone in fixed income valuation (structured products, real estates) at big4, how do you think I should prepare myself for this type of role and what can I do/put on my resume to get the interview? What are your colleague's background? ex-bankers, ex-val guys? Are most of the corp dev jobs located outside of big cities such as NYC? Just asking because I feel like these jobs are usually at corporate headquarters. Thanks again!
 
Nov 5, 2014 - 2:43pm
WombatOfWallStreet:

Thanks for doing this. Got 3 questions for you:

As someone in fixed income valuation (structured products, real estates) at big4, how do you think I should prepare myself for this type of role and what can I do/put on my resume to get the interview?

What are your colleague's background? ex-bankers, ex-val guys?

Are most of the corp dev jobs located outside of big cities such as NYC? Just asking because I feel like these jobs are usually at corporate headquarters.

Thanks again!

@"Zatopek" Thanks for the input - as your post brought back a flood of memories. At my firm there was quite a divide between the audit team and the val team. It seemed like the audit team thought we were supposed to be completely at their disposal and drop everything for any request they had. Had some pretty unreasonable deadlines at times - pretty frustrating at times. 1. I'm not too familiar with fixed income valuation and the nuances of that but I can speak to valuations in general. I think one thing that is often over looked in valuations is that you have exposures to deals. While you may not of put them together you worked on it and have some understanding of the deal. So in that aspect you can sort of set your resume up like a bankers - using "deals" you may have worked on. I think fairness opinion/solvency or any pre-deal exposure you can get is the best thing to do and highlight that on your resume (due diligence processings/M&A advisory etc.). Its all about being creative with your experiences and spinning them into how they are just like the role you want. 2. Our M&A team works extremely closely with the Strategy team. So we have some ex-MBB guys and Bankers/PE. I'm the only one without a management consulting background or banking on my team. 3. Corporate Development roles are pretty much run out of the HQ - execs need to be keen and kept up to speed on acquisitions or divestitures.
 
Nov 5, 2014 - 6:36pm
Thank you for doing this! I have a couple questions: During your time at the big 4 and independent shop, did you have any experience with dispute consulting or is this usually a separate group from valuations? Any idea of what exit opps would be like for dispute consulting (I'd imagine it would be a bit worse than business valuations)?
 
Nov 5, 2014 - 9:37pm
swode:

Thank you for doing this! I have a couple questions:

During your time at the big 4 and independent shop, did you have any experience with dispute consulting or is this usually a separate group from valuations?

Any idea of what exit opps would be like for dispute consulting (I'd imagine it would be a bit worse than business valuations)?

For clarification I never worked at Big 4 but a middle market accounting firm (GT/McGladrey/BDO). I did not have any interaction with the dispute consulting team so I can't really speak to the exits for that type of role. I would imagine if you are looking to exit into any type of transactional type role (banking or corp dev) that would be an extremely tough transition. Although i think transitioning to a b val role from dispute within the same firm would be much easier.
 
Nov 6, 2014 - 11:47am
Did you apply to any PE or AM roles? or even ER? I like your info on how people made the switch to Corp Dev and I-Banking but I am curious about people making the switch to these other options. I am about to enter a Big 4 Val position and aim eventually aiming for a buy side position, preferably PE. Did your recruiting process give you a feel for how practical this was? Thanks!
 
Nov 6, 2014 - 12:17pm
Zendro:

Did you apply to any PE or AM roles? or even ER? I like your info on how people made the switch to Corp Dev and I-Banking but I am curious about people making the switch to these other options. I am about to enter a Big 4 Val position and aim eventually aiming for a buy side position, preferably PE. Did your recruiting process give you a feel for how practical this was? Thanks!

Yes I did. I've seen people move into ER from valuations so its not unheard of. I never really had an interest in ER so I can't say from personal experience how easy/hard it is to move into those roles, but I have seen it done by a handful of people. As for PE, I'm going to say there is pretty much zero chance of moving from b-val to PE. You'd have to network your butt off and know some pretty high up people (maybe a small small fund may take a chance on you). I believe almost all PE firms require ibanking background and maybe you can get by with management consulting background. I believe most PE firms set a hardline on this requirement. Moving from B-val straight to PE i believe is pretty much unheard of. I'd say if you really have your heart set on PE, your best bet is to move into TAS/TS (Due diligence) ASAP and then leverage that to banking, then leverage that to PE.
 
Nov 6, 2014 - 11:43pm
Sorry to jump in on this thread but I felt the need to supplement some of the information presented in this post. My Background: Big Four Valuations and Business Modeling Associate. Internships in IB / PE. 1. TAS is not the best way into IB. Professionals in TAS essentially perform the same function as Audit and analyze quality of earnings. Additionally, many of those in TAS spent 2-3 years in Audit. There are few transferable skills to IB in this role. Those that transition to IB typically go to no-name boutiques. If you want to be a banker you need to know how to build financial models......not how to clean financial statements and make adjustments to EBITDA, 2. Valuations and Business Modeling > PE is definitely possible; especially if you work for PwC/Deloitte which tend to place better into front office roles. You will need to network and typically need to stay longer than at an IB to make a decent deal team. On this thread you will see many bash Big Four Val. but it's not as bad as they say in terms of exit ops. And by PE, I mean a MM fund......obviously you need BB IB / top MM IB to make Mega cap PE / top MM PE. 3. The quality of the exit opportunities you receive will be directly related to the types of projects you work on. If you do pre-deal consulting in a valuations group your exit opportunities will obviously be better than if you have only done PPA (purchase price allocation) and Tax Valuation projects. Only top performers at my firm get to work on pre-deal advisory projects which are essentially fairness opinion type analysis commissioned by Corp Dev. teams. You will build valuations models with assumptions from management / management consultants / TAS groups working on the same deals. 4. If you are at BDO/McGladrey/GT I would suggest moving to the Big Four to get better exit ops. If you want to work in finance you are already at a disadvantage working for an accounting firm. And the brand you have on your resume will be important. Furthermore, you will have better clients which means better access to Corp. Dev. / IB if you network with the other firms working on the same deals. And if all else fails, your placement into an MBA program will be MUCH better at the Big Four. 5. In terms of exit ops, the timing you need will differ for each opportunity. If you want IB, you have the best chance if you came in right out of school and have greater than 1 year but less than two years of experience. For Corp. Dev. and PE, you should be targeting the 2-4 year range to exit. Once you make manager it becomes alot harder to leave. If you are a top performer and get picked to work on pre-deal consulting projects, you can make moves if you know how to hustle. Early promotions and getting the best projects will allow you to spin your experience when you try to make the jump to another position. I have seen people in my group make the jump to MBB, Corp Dev., IB, and PE. It's harder but doable. Good luck to all of you trying to make moves. I hope this perspective helps. Please excuse any spelling and grammar mistakes I'm not rereading this.
 
Nov 11, 2014 - 9:04am
Sirius6:

Thank you for the in-depth input. Quick question for you:

Where does the Big4 Vals stand inside the firm? Is it a middle office under the Advisory practices? It sounds more like an internal support team to Audit and Tax practices, so it is not a revenue generator, right?
I assume they hire fresh out of schools? Thanks!

You couldn't be more wrong. Valuations is the most competitive group to get into outside of management consulting at the big four. The interns we took this year all came from top 50 business programs and had ~ 4.0 GPA / multiple internships in corporate finance with blue chip companies (Verizon, J&J, etc.) And only ~15 associates will be hired directly from campus in a given year. Typically you need experience to even get an interview here. We do work with Audit and Tax but not for them....we communicate directly with the client and compete with other firms for their business. We also do Fairness Opinions and other pre-deal analysis for companies considering a merger which is the best experience if you are interested in any other transaction related jobs....Corp. Dev., IB, PE, etc.
 
Nov 7, 2014 - 6:48am
boku:

Is it easier to move from TAS or valuations to corp dev? And have you seen any valuation guys move into TAS?

Thanks for doing this!

I work in corp dev and come from a big 4 background. For me both TAS and valuations have skills transferable to it. On the DD side we do this obviously for our deals and do this ourselves mostly rather than having consultants (I don't know but i imagine at larger companies, mine is only small under $1b mkt cap, so v small deals, they use TAS to do the DD rather than in house). On the vals side we do all the modelling etc, so obviously these skills are useful too. So in answer, I think both are very useful. Maybe TAS is better as you get to work more with deals taking place, whereas in vals you may just be stuck all day doing vals for audits and tax.
Big 4 Accounting Guide to Getting Hired Contains interview questions, exactly how to answer, resume guide, how to make an impact and a guide to the firms and service lines.
 
Nov 7, 2014 - 9:25am
You can move from Val. to Tas if you have a CPA. Although I haven't seen anyone try to make that transition. balooshi is correct when he says that overall you are more likely to be working on current deals in TAS. I look at it this way in terms of the hierarchy of transaction related projects at the Big Four. Fairness Opinion / Pre- Deal Asset Valuation > TAS > Audit / Tax related Val. work. Again, if you can't build financial models you will be at a disadvantage unless the group you are working for does their financial due diligence in house.
 
Nov 7, 2014 - 10:04am
boku:

Is it easier to move from TAS or valuations to corp dev? And have you seen any valuation guys move into TAS?

Thanks for doing this!

That's a good questions, I would probably give the edge to TAS. M&A for whatever reason are very enamored with the skill set you pick up from doing due diligence. I have not seen many people move from valuations to TAS (although I don't know anybody that has tried) but I do know talking to a TAS director that they covet people with audit background. Most people who are working in TAS have an audit background.
 
Nov 7, 2014 - 10:10am
BankerC159:
boku:

Is it easier to move from TAS or valuations to corp dev? And have you seen any valuation guys move into TAS?

Thanks for doing this!

That's a good questions, I would probably give the edge to TAS. M&A for whatever reason are very enamored with the skill set you pick up from doing due diligence. I have not seen many people move from valuations to TAS (although I don't know anybody that has tried) but I do know talking to a TAS director that they covet people with audit background. Most people who are working in TAS have an audit background.

This is what I have seen as well. I think there is a big misconception on this site that TAS = modeling. It's really just due diligence for PE firms. This explains why people with audit backgrounds are recruited to these groups.
 
Nov 7, 2014 - 10:59am
BankerC159:
boku:

Is it easier to move from TAS or valuations to corp dev? And have you seen any valuation guys move into TAS?

Thanks for doing this!

That's a good questions, I would probably give the edge to TAS. M&A for whatever reason are very enamored with the skill set you pick up from doing due diligence. I have not seen many people move from valuations to TAS (although I don't know anybody that has tried) but I do know talking to a TAS director that they covet people with audit background. Most people who are working in TAS have an audit background.

Personally I have seen people in valuations get recruited into global fortune 100 Corp. Dev. groups. If you work for PwC or Deloitte, the valuations group works closely with strategy groups on some projects to do ROIC and NPV analysis of capital allocation in situations when management is considering doing a deal (or trying to decide between deals). Working in TAS doesn't give you that type of exposure or modeling skills. The FDD skill set is definitely relevant but if you work on good projects in a top val. group then val. is the better place to be in IMO. If you want to verify this just get on linked-in and do an advanced search.
 
Nov 11, 2014 - 4:56pm
Question for anyone that feels like listening... Am an engineer in oil and gas looking to get into energy IB, but currently have an opportunity to join a big 4 advisory / valuation group. From what I've seen from profiles on LinkedIn, some of the work may be purchase price allocation and tax valuation work for fixed assets; not sure how much, if any, could be pre deal transaction/consulting/valuation work within group (would be client facing though so that's a plus). Any opinions on which might be the better choice: stay on as engineer or join big 4 advisory (would still cover oil and gas). I figured joining the big 4 may be good to get some business / modeling and finance, albeit very basic, experience and then leverage that after ~1.5 years to banking but am curious on your thoughts. Obviously realize that both situations require me networking out my ass so no need to waste space mentioning that...fire away
 
Nov 11, 2014 - 5:24pm
prospective_monkey10:

Question for anyone that feels like listening...

Am an engineer in oil and gas looking to get into energy IB, but currently have an opportunity to join a big 4 advisory / valuation group. From what I've seen from profiles on LinkedIn, some of the work may be purchase price allocation and tax valuation work for fixed assets; not sure how much, if any, could be pre deal transaction/consulting/valuation work within group (would be client facing though so that's a plus).

Any opinions on which might be the better choice: stay on as engineer or join big 4 advisory (would still cover oil and gas). I figured joining the big 4 may be good to get some business / modeling and finance, albeit very basic, experience and then leverage that after ~1.5 years to banking but am curious on your thoughts. Obviously realize that both situations require me networking out my ass so no need to waste space mentioning that...fire away

Ok one thing to point out is valuations has both a fixed asset, real property, and financial aspect to it. I've only worked on the financial side, so for instance in a PPA the fixed asset valuations group would value PPE and we would use the fair value of fixed assets in our Weighted Average Return Analysis (WARA). Real quickly - the WARA needs to match up with the WACC and IRR. From the financial end we would calculate the IRR/WACC/Intangible Asset Valuation ect. The fixed asset valuation is a piece of the full valuation for a PPA (in deals that aren't fixed assets/real property heavy). I'm not entirely sure if the methodologies are interchangeable (I assume so) but maybe someone else can speak in more detail about that. If B-school is not an option, then you could leverage your modeling skills learned in valuations to a role at a O&G IB. Although, I'd double check that the valuations work you would be doing are "financial" and not solely "fixed assets". I think the exit opportunities are different. I think after a year of valuation you would want to start looking for IB roles.
 
Nov 19, 2014 - 9:36am
BankerC159:
prospective_monkey10:

Question for anyone that feels like listening...

Am an engineer in oil and gas looking to get into energy IB, but currently have an opportunity to join a big 4 advisory / valuation group. From what I've seen from profiles on LinkedIn, some of the work may be purchase price allocation and tax valuation work for fixed assets; not sure how much, if any, could be pre deal transaction/consulting/valuation work within group (would be client facing though so that's a plus).

Any opinions on which might be the better choice: stay on as engineer or join big 4 advisory (would still cover oil and gas). I figured joining the big 4 may be good to get some business / modeling and finance, albeit very basic, experience and then leverage that after ~1.5 years to banking but am curious on your thoughts. Obviously realize that both situations require me networking out my ass so no need to waste space mentioning that...fire away

Ok one thing to point out is valuations has both a fixed asset, real property, and financial aspect to it. I've only worked on the financial side, so for instance in a PPA the fixed asset valuations group would value PPE and we would use the fair value of fixed assets in our Weighted Average Return Analysis (WARA).

Real quickly - the WARA needs to match up with the WACC and IRR. From the financial end we would calculate the IRR/WACC/Intangible Asset Valuation ect. The fixed asset valuation is a piece of the full valuation for a PPA (in deals that aren't fixed assets/real property heavy). I'm not entirely sure if the methodologies are interchangeable (I assume so) but maybe someone else can speak in more detail about that.

If B-school is not an option, then you could leverage your modeling skills learned in valuations to a role at a O&G IB. Although, I'd double check that the valuations work you would be doing are "financial" and not solely "fixed assets". I think the exit opportunities are different. I think after a year of valuation you would want to start looking for IB roles.

As someone who was in Fixed Asset valuation at a top shop...think D&P, BIG 4....it was the single biggest career mistake I have ever made. I thought I would be doing more DCF, wacc stuff like every other group uses..but nope. We essentially copy/paste info into models in excel and make sure values flow through, etc and then just back our findings up with research. Essentially were half ass appraisers since we don't particularly have a true specialty beyond what our models say. I took the role we the assumption I could move in a year or so into IB since thats a very popular and common move a lot of analyst make as well as middle market PE firms. 90% of analyst move into roles like this. I am having an extremely hard time doing this with fixed asset valuation because its such a minor skill set with no other application. Would highly recommend not going into it. BVAL is the way to go.
 
Feb 11, 2015 - 11:09am
snarky:

Anyone with Big4 Valuations experience in Asia (Tokyo, Hong Kong)?

I was wondering if the type of work would differ amongst Valuation groups in different geographical locations.

Probably won't be very helpful but I do know at the boutique valuation I worked at the Asian offices did quite a bit more pre deal work (fairness, valuations etc.). I'm not sure if that's the case that the Asian market leans on accounting firms for this analysis or not, but maybe.
 
Mar 1, 2015 - 8:34pm
FDD:

As someone who is currently a manager in TS (due diligence) at a big 4, what would you recommend I do to transition to valuation (I am already a US CPA and I am taking CFA L3 in June)? How difficult do you think it would be to do? Would the ASA certificate help or waste of time?

I've personally never seen anyone try to move from due diligence to valuations. I would try to reach out to someone in the valuations group to see if you could move over or maybe see if you can help them out with some projects. My old firm would try to accommodate those who wanted to move offices/groups and sometimes it wouldn't work but I think culturally, accounting firms are open to it. ASA may help but its pretty expensive and time consuming (its typically Wednesday through Sunday) if your firm wont sponsor it. Sorry, I couldn't provide more help.
 
Mar 10, 2015 - 9:51pm
Question back to TAS here for a second. I'm not really planning on transferring into a IB/PE career, but I'm considering leaving big 4 audit (2.5 years in, currently a senior) and going to a 3rd tier firm for TAS (like top 10-20). I'm curious about longer term implications of this decision, like if in 3-4 years I want to get out. I'm comparing this primarily to staying in big 4 audit (until manager). My thinking is that I don't want to do internal audit or financial reporting (typical big 4 audit exits), and I would think that TAS would set up nicely with FP&A or corp development. I'm wondering if "stepping down" to a 3rd tier firm would look worse than if I had just stayed at big 4 in audit for the same amount of time. The firm is actually well known and respected in my particular region, though. I'll go ahead and answer the question that I've tried to make the switch internally, but there's a small group and not really any growth in my city with my firm in TAS.
 
Mar 11, 2015 - 11:13am
Soros:

Question back to TAS here for a second. I'm not really planning on transferring into a IB/PE career, but I'm considering leaving big 4 audit (2.5 years in, currently a senior) and going to a 3rd tier firm for TAS (like top 10-20). I'm curious about longer term implications of this decision, like if in 3-4 years I want to get out. I'm comparing this primarily to staying in big 4 audit (until manager). My thinking is that I don't want to do internal audit or financial reporting (typical big 4 audit exits), and I would think that TAS would set up nicely with FP&A or corp development. I'm wondering if "stepping down" to a 3rd tier firm would look worse than if I had just stayed at big 4 in audit for the same amount of time. The firm is actually well known and respected in my particular region, though.

I'll go ahead and answer the question that I've tried to make the switch internally, but there's a small group and not really any growth in my city with my firm in TAS.

I think the longer you stay in audit (big 4 or otherwise) the farther behind the eight ball you put yourself. I think its plausible to move directly from audit to FP&A/Corp Dev, especially from a big 4. It will take some legwork since you will lack the modeling skills - but strong accounting knowledge is a plus. If you have desire to move in the TAS, I would do so immediately (I know its the middle of busy season) and stick it out for a year and try to exit. I would try to make the direct jump as a senior, while you are relatively young in your career - it will be hardwork but I think as a manager in audit, you will pigeonhole yourself to audit. Unless you want to go back to school, in which there will most likely be a vast array of opportunities for you. Just curious, what is a third tier firm? I'm assuming: 1st Tier (PwC, EY, KPMG, Deloitte) 2nd Tier (BDO, GT, McG) 3rd Tier ???
 
Apr 7, 2015 - 11:36am
mongonese:
How much do you travel? Who travels the least within industry? (Corp. stratey, corp. development, corp. finance, etc.)
I can only tell you from my experiences in Valuations and Corp Dev. I traveled more in valuations (mainly for conferences and ASA - never really for actual billable work). Corp Dev I have not had any travel in my time here. Travel seem to be reserved for more of the higher ups to visit targets. But again, this really varies among companies/groups hard to have a hard fast rule on this.
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