Q&A: MD in M&A and Cap Markets (Bulge Bracket and Boutique experience)

I'll work through these questions over the next few days as things have been busy. But will get to them, so be patient guys.

To answer your questions:

1.) Main one is ability to interact with clients - personality. You can't necessarily be that excel monkey anymore and need to be able to interact with clients and be external facing. Sure you need to be able to execute etc, but banks aren't going to hire you because your modeling skills are top notch. I've seen a lot of guys just have enough modeling to get through their junior years and then be that "cocktail' guy as they hit VP and were able to interact with clients well. They managed their juniors well to have them to the analyses, which they understood and could explain, but weren't necessarily the expert in putting together a model.

2.) For me it was/is deals. I enjoy the thrill of the deal from pitch to completion. Being able to help a company accomplish its goals. It isn't about leaving a mark, since the only people who will recognize that mark are the company and you (and it's memorialized in a deal toy).

Now having said that, I think the up and coming group of bankers are different from my "vintage". There is a real commitment to think about your career and, more importantly, to do something about it if you're unhappy. I think there is a lot of inertia and keeps people where they are. You almost need an "event" like a layoff to get one to think about whether they want to stay in the biz or try an adjacent or completely different one.

1.) Personally, it has made interaction with clients and the team more difficult. Clients don't want to see you in person and you can't walk out of your office to have a chat with members. The uncertainty of when this will end puts worry into people about bonuses, but more importantly, jobs.

2.) None other. The best thing is to always start planning for a worst case scenario. Remove unnecessary expenses. Potentially look for jobs out there.

3.) Main thing is to remain calm. The world may seem like it's falling apart, but it all comes back eventually. You can't predict the timing, but you can take steps to mitigate any unnecessary pain. Conserve cash, reduce spending (given stay at home orders this should be somewhat easier to do). Focus on what you can control - you can look for jobs, update your resume, network still. Look at doing another degree to wait out the harsh economic times. But don't sit around and just hope. Be active and do something to better yourself.

Did general corporate finance, so focused on M&A, ECM, DCM, and a bunch of random items - fairness opinions etc. Over time, I decided ECM would be an easier lifestyle for about the same pay. But given I had a good corp fin foundation, I could switch back to M&A when markets were depressed.

It's easier to go from M&A to Cap markets, but not the other way around. As a junior better to focus on the core modeling skills, which you don't get in cap markets. Once you have them you can go either way.

Key traits:

• attention to detail / not sloppy with work
• anticipates next steps
• asks questions instead of thinking he/she knows everything
• pleasant person with good personality, not arrogant
• acts like the level above him without the arrogance - no one likes a Managing Analyst

I had one 3rd year analyst who was essentially operating like a junior VP in my opinion. His work was always clean and detailed. But what I liked about him is that he learned each day. He saw what I liked and anticipated what I would expect. He would make my life easier, which in turn made his life and those who worked with him easier. Made it extremely easy to always fight for him at bonus time.

1.) I did because I knew the modeling and had familiarity with "the way things worked" in my team. Also, I had the goodwill of the seniors who knew me and trusted me. A new MBA has to prove himself, which takes time. All this meant is that I had a lead, but I needed to keep that lead and not get complacent.

2.) Yes

3.) It definitely is a consideration. If you're rocking it already as an analyst then probably not. I say keep going. Once you get in and start work, your undergrad becomes less important and it's your skills, personality etc that take the front seat. Getting an MBA is an option if you want to consider a career change, build your network, or simply take a break from the grind, but at least are doing something "productive"

It's probably going to be worse in the UK for a variety of reasons. Obviously Covid and its economic ramifications. There is also the whole Brexit situation, which has taken a back seat lately due to Covid. Not sure what bank your friend is from, but most analysts (generally) are safe as they are cheap and can do the work. There will obviously be layoffs across all levels at certain places, but bigger shops (unless things are bad) can usually maintain the junior staff.

That said, if they are recruiting FT, then make sure you're on it. Try and get the internship, network like crazy, and especially apply early.

At the moment, it's everything Covid related. Will deal flow return to normal? Will companies want to do deals as the economic forecast looks bleak? Politics is an issue as you can't interact with people in person and just "drop by someone's office" to chi-chat or make nice. Tough to do that over a random video call. Biggest concern for everyone is job security. Banks were handcuffed by the optics of laying off massive amounts of people earlier this year when the pandemic struck. Now that we're in the thick of things and people are familiar with the dire environment, you're starting to see a wave of layoffs slowing starting to build. Virtually no hiring.

Haha. You guys think big.

The reality is that it comes down to how you want to live later in life. I know plenty of my colleagues have decided they are fine with the "simple" life. They are married, kids, etc, but don't live that bling lifestyle. Some of their wives work and have comparable paying jobs (in corporate, tech, and banking). A lot have made it an aim to live off one person's salary and save the other person's.

What that number is, I can't tell you. But keep in mind you can get canned any time - that's the reality of the business, especially these days. So the decision is to either live and spend like there's no tomorrow or save so you can live comfortably later in life. The balanced view is to spend comfortably where you don't need to think about what you spend on, but not like some rockstar.

As for personal financial decisions - main thing is to marry the right person. Not saying your spouse needs to be rich, but just make sure you marry someone who will support you in good and bad times. Divorce is a bitch. So many of my friends have been divorced and whatever you earned just disappears and you're back to square one...

There isn't a right or wrong answer. If money is purely your focus, then perhaps jumping around makes sense, but it could prove to be a foolish strategy later when people start to ask you why you jumped around so much. If you're going to do it, make sure you get paid to the moon.

I think consistency is good, but it doesn't always work out like that. I've moved around more than I liked, but it was done purposely or involuntarily. But when I did move, I tried to ensure I squeezed as much as I could out of the bottle to ensure it was worthwhile.

You're right, Path A is the tried and tested path, but don't feel you need to stay at one place the whole time. Begin at one place and see how it goes. If you feel deal flow is lacking, politics are at play and you might be out, or you're not being compensated appropriately, then maybe consider moving to another firm. But if you move, make sure that firm is a place where you can see yourself growing as well.

If you follow Path B, you could have a bit of an uphill battle later when you try to explain why you've moved so many times. If you move to a lower tier bank, you definitely can move back up to a higher tier one, but you'll need to do really well at the lower tier. If you're just a run-of-the-mill banker at the lower tier, it will be tough to move. I've seen some colleagues move to lower tier later in their careers after they've garnered good experience to become the big fish in the small pond. They were very happy with that. They had families and weren't in the clubs so didn't need to impress anyone with name dropping their firm.

I did when I was junior. However, I wasn't interested at that time. I was more focused on deals. Tbh, I was a rube and just didn't know any better. Today's group are more attuned and well focused on other opportunities besides banking, which is great.

I would have loved to move into the buyside at the mid-level but it's just not really done there. Perhaps in the future.

Regrets? No. Could I have done things differently? Sure. But for me, it's the skill set, both tangible and intangible, that has proved invaluable for potential opportunities within banking and outside it in corporate. That I am grateful for.

It wasn't too difficult as I did a lot of IPO work in my sector team at the time. I made the transition internally actually. Eventually I moved externally and changed back to sector/M&A.

Even if you don't have cap markets experience, it's pretty straightforward work. The key is being able to prove to the team you can do it.

This is a tough one to pull off. At this point, realistically, it won't happen. However, one alternative is to get an MBA. You're going to be much older and when you're done, you will also be older for ASO positions and will need to convince banks that you want to and can handle the hours. A left field possibility is to work for a smaller broker dealer doing smaller deals. You'll have to convince them you are serious and are willing to put in the hours, but they might be more inclined to take someone with an "alternative" background.

All the banks get a lot of shit here. UBS is decent. It's a brand name. Obviously, if you can go higher, do it. But if UBS is all you have, then take it. The brand will help later in your career especially when you're starting out. Right now, it's damn near impossible to get an analyst job. If you get a BB, then take it. Just be grateful they are interested in you. Congrats.

Yes. Once it was for cause - he violated some very standard rules and was already given a warning about it. Another time it was for expenses.

As for health, when you hit your 30s start easing down the alcohol, especially the highly caloric drinks like beer. Also, need to watch what you eat. Make sure if you snack it's on the "healthier" side like fruit. But all this means nothing if you're not exercising. As I got more senior and was able to control my time, I ensured I always got some exercise - whether biking or walking to/from work, taking midday walk breaks, and making sure I carved out exercise time every weekend. It's hard as hell and I've never been consistent, but it helps to have the mentality and a schedule.

Yes, it's possible to start at a no-name boutique and lateral later, but it is a climb. Unfortunately there is too much elitism and snobiness out there. You would definitely need to be top bucket AND network like crazy. Obviously making the move from no-name to BB is ideal, but you might need to make the small hop to MM first and then make a name for yourself there and then hop to BB.

Working your way up at a small shop could be a better route as, if you perform well, you are probably a big fish in a small pond and could get more recognition externally as well as internally. Also, hopefully at that point you have a strong book of clients which can be a good selling point if you decide to move. But I know a lot of people who started at small shops and just remained there as they liked to be King of the Hill.

Personally, I know of one person who moved from a small shop to a big one at the junior level. Most of the ones I've seen are at the senior level (as described above). Of course, this is just one data point and there are probably a lot of others I don't know about.

Directors are in some ways just junior MDs. For a VP to be ready for D, they need to be able to start building relationships or source relationships. It isn't expected that they pull in some Fortune 500 company, but if they can demonstrate they are building relationships that is a huge plus (e.g., senior exec at company tends to call the VP as the first port of call). There are the other bits of being able to manage transaction and people, which is becoming more important these days. Technicals are not as important, but good to have a firm understanding, but you don't want to be known as the guy who is just the technical expert.

The key thing they would be looking for is technical ability. Have you done valuation analyses and modeling etc? Need to be able to show how well you know this stuff so they feel comfortable you're not starting from scratch. The other important factor is being able to demonstrate deal execution. Highlight how you have done deals and probably even had more responsibility and interaction with senior level people, internally and externally. Also, speak to how you (might) know other players in the industry and obviously have a strong/good relationship with your current employer, who could be a repeat client even if you move.

If you're dealing with BBs/MMs and feel you have built a good relationship with some of the people there (probably VP and up), perhaps reach out and let them know your interest in moving to IB. Make sure you already have a quick elevator pitch in place in case they ask. If you see openings at the bank they are at, let them know you would like to apply and ask if they can help you get your resume in. Obviously this is done if you have a good relationship with them.

1.) This is tough as circumstances change quickly. Restructuring is flavor of the month right now, but could easily go back to being somewhat quiet if/when things return to normal. The other option is M&A, along the same lines as restructuring as Covid continues. Tech has been pretty hot as some companies are looking to pick up others at depressed valuations.

2.) To an extent it is, but you're going to have to be able to explain clearly every time you moved, why you moved. Eventually once you've reached closer to D and MD, you will need to demonstrate client relationships as a key reason.

3.) Depends on which group you're in. Some banks have a corporate advisory or Equity advisory team which focuses purely on execution. You can move up and do well here. But they won't have a lot of MDs here. At most 2-ish and the rest of the team will be leanly staffed. In tough times, this team will likely be touched first. You really need only 1 MD at top and maybe a 2Ds at most. Since this is such a nice job, most just continue to stay forever. Sometimes they move off into management roles and these groups tend to be a pathway into that.

If you're already inside an ibank in MO, then it really comes down to networking. Speak to those in IB and inquire about potential roles that might be open. If you work well with particular bankers, definitely try and grab and coffee with them. But key to all this is that if you are working with bankers, then make sure whatever you do is perfect and done well. I've overheard so many bankers complain about MO / BO people (rightly and wrongly). However, if there is a good one they sing their praises.

As for skills, the key thing you need to convey is the modeling/financial skills. If you're coming in direct (as in the middle of the year) as an ANL, you need to prove to them that you possess these skills. One option is to try and get into the ANL program so you start the following year so you do the pre-work training. The other option is to try and swing an internship (which means leaving your MO job though) during the summer and then trying to convert that into a fulltime role.

In the first 6 mths or so, yes there is a meaningful difference. A2As are already up and running. They know all the nuances of the team - who likes what? who doesn't like what? etc. Seniors generally don't want to test an unknown entity (and having things done wrong or wasting time) so they tend to look to A2As to be the point person. Also, sometimes it will be an ANL2 or ANL3, who will lead over a MBA ASO, which can sometimes cause tension. As for how long, it usually is a year properly for a MBA to get up to speed. But by 6 months he/she needs to show they are heading in the right direction. If they are talking about Black-Scholes models and using that to do models, then they will continue to be labelled as theoretical junkies.

I've seen it a few times. It's not as rare as one thinks. There are a variety of reasons. Some just felt more comfortable / enjoyed banking more. Some had bad experiences on the buy-side and decided to move back to what they are comfortable with. Others followed the herd and went buy-side because everyone went there (I guess you can say a lot did that with banking in the first place). I don't necessarily have a negative view of this when interviewing candidates. A lot of them come back with better modeling / technical skills as well as more contacts in their network. Usually spend the time to understand their motive and to try and figure out if they are just "jumpers." Everyone has a story.

Definitely better than when I was a junior. The main reason being because I could, for the most part, control my time. I could set up dinners / time with the family and steer work obligations away for those time slots. But having said that, it's not completely free. Plenty of times where I had to move a date or vacation, but because it was less frequent than when I was a junior, it, perversely, didn't feel as bad. All in all, your life "gets better" since you've been dealing with high stress all through your junior years, but to the average person this would still seem ridiculous and insane.

Really it comes down to personality. You need to be someone who can hold a conversation about anything or at least feign interest in the topic. They like to call this person the "cocktail guy." He's the person everyone loves to chat with. Of course, you need to back this up with smarts and good content, but you need to be someone who can read the situation and switch between work and non-work topics as led by the client. A lot of the time I've seen people get promoted or top bucket because "everyone just likes him/her" or "thinks they are a good guy/girl." And the best way to become that person without trying so hard is to be someone who can interact with people without being awkward. Someone people want to be around. But the caveat is that all of this needs to be supported by the content and quality of the material, If you just talk shit all the time, people might like to be around you at the party, but they won't want to have you in the boardroom.