Q&A: State School > BB M&A > TMT Investing > Corp Dev

Cmon boss pretty obvious answer here

Networking is probably the single most important thing when it comes to securing a front office finance job out of undergrad, especially if you come from a semi to non target. I don't want to go into too much detail on "how to network" as it's been covered ad nauseum on this site and I don't really have anything insightful to add. I will say networking was extremely crucial to me in securing my first two internships in undergrad - had I just blindly applied on each companies' career website I don't think I'd be hosting this Q&A today lol. In terms of does networking build social skills I'd say maybe indirectly, but hopefully, you have some decent social skills heading into your networking sessions otherwise they're likely to be awkward and potentially unfruitful. I've had a number of conversations with kids who are clearly book smart and competent but clearly lacking in the social awareness and social skills departments and it shows; given banking is highly people focused and there are way more applicants than there are seats, it's basically a kill shot and impossible for me to push for the 4.0 hardo kid who asked weird questions and doesn't know how to hold a conversation over the 3.7 kid who is much more socially well adjusted. Especially at the analyst level where the only thing helping you maintain your sanity is your social interactions and shooting the shit with your analyst class, it's pretty important to be a normal person that others want to be around. I'm sure there's a near-unanimous consensus on this point on this board and across the street. TL;DR: don't be weird and utilize every opportunity you have in college to become more socially well-adjusted.

Maybe? I've never seen it done to be honest. My question would be why would you do that - do you have visa issues or something? What would the masters degree be in? I don't think a masters makes you any more competitive for PE recruiting than already being at a top IB group. You're going to get hit up by HHs for all the major funds in your first year (during pre-pandemic times anyway) for ops at all the major funds. To me, this is at best a step sideways and more than likely a step backward if your goal is MF PE. Now if the degree is for something very specific that would actually help you have an edge as an investor (for example, a degree in molecular biology and your plan is to focus on investing in biotech), then that could potentially make sense, but even then I think you're better off heading to MF PE right from banking, then making the move to do a masters after your PE stint since those are mostly 2 and out. Then there's the issue of not being in the US and trying to recruit for MF PE roles - you simply won't be prioritized by HHs. Having now seen how HHs work from the other side, they'd almost certainly put you in a lower tier for not being local anymore and not currently being in the workforce. This will more than likely close a few doors that could have been open to you otherwise had you recruited for banking. Geography does matter for buyside recruiting. 

Nope. Very content with what I've accomplished and where I am so far. Did banking suck while I went through it? For the most part, yes but if I had to do it all over again I probably would. I've made some of the best friends I've ever had while I was in banking and that is incredibly invaluable. Do I wish I'd have ended up going to an HF instead of the path I ended up taking? Not really, I've become fairly jaded in regards to public markets investing over the past few years and have lost my passion for the markets in large part. I'm finding private market opportunities, business building, and corporate strategy much more interesting than trying to guess a quarter or develop an "outside look" investment thesis that could go against you for any number of exogenous reasons. That said, I've debated leaving finance altogether and may still do so in the next few years. I started my current role fairly recently and am very happy here so far. Keeping an open mind about staying here long-term while also keeping my options open to potentially leaving the industry later down the road, but wouldn't be for 2-3 years the absolute soonest. The reason for this would simply be to pursue other things I am interested in and start my own business. I've always wanted to take a crack at entrepreneurship and working for myself - with that in mind my time in finance will likely be crucial in giving me a better toolkit to potentially be successful in this endeavor, so even then I don't think I'll regret having started in finance vs. doing that right out of college. Not to mention the savings I'll have accumulated from working in finance that I wouldn't have otherwise which will be able to sustain me for quite some time and capitalize my potential business while starting out. 

A few thoughts below:

• Keep your GPA as high as possible: Due to sheer numbers, there's going to be more competition and nominally more people with a high GPA. So you're putting yourself at a disadvantage by having a 3.5 vs. having a 3.9
• Leverage your large alumni base to network: chances are given the size of school you have a large number of alumni on the street or whatever area you're trying to break into. Leverage this and reach out to alum early and start networking sooner rather than later, otherwise, there's a good shot someone else is
• Join some interesting clubs: your student fund/investment club should be a give, but try to do something else in addition to that to help you make friends outside of the business school and make yourself a more interesting person to speak with when networking/interviewing. Can be an intramural sport, theater club, band, etc. but it should definitely be something non-business related
• Get to know your professors well: I'm not saying to be a total nerd and teacher's pet, but your professors can be incredibly helpful when it comes to networking as they've probably sent a number of students to the street or whatever are you're trying to break into. Don't underestimate how helpful your professors can be
• Develop your social skills: alluded to this in another response above, but one of the biggest benefits of a state school is having the opportunity to become a socially well-adjusted person. Whether it's joining a frat or something else, find a way to hone and improve your social skills and ability to relate to people of varying backgrounds. Enjoy your college experience because the friendships you develop and crazy stories you may have you'll remember for the rest of your life

It really comes down to putting in the work and effort while balancing being a normal person. Being at a state school you're going to have a larger number of people to compete against. Maybe the quantum of these people who are super driven is fewer than NYU/UChicago, but I don't think it's wise to think like that. Work hard, play hard.

For context, I knew since college I wanted to focus on media, entertainment, & telecom investing in some capacity. At that time in college and in my first year or so of banking, my desire was more to do it via traditional L/S and public markets. When the opportunity to work at that firm popped up, it was basically a dream job for me, so I took it without much hesitation. I knew I'd gain a very unique and differentiated skillset there while learning from the best of the best in the media, ent & telecom spaces. Given the uniqueness of the role, I discovered that I really enjoy corporate strategy, which I had a fair amount of exposure to, and how corporate M&A fits more broadly into a firm's overarching strategy and long-term goals. Simultaneously I started to become a bit jaded with public markets investing and some of the opportunities available there. I didn't want to call quarters at a MM platform; traditional L/S started to seem like educated guesswork where you buy and hold till the stock moves in your favor. It all started to seem very intellectually dishonest. I know that's over-generalizing and by no means am I trying to knock those jobs, but that's how I started to feel and realized I didn't want to spend my days as an outsider forever trying to peer in. I really enjoyed getting to work with some of the portfolio companies on broader strategic goals and on smaller bolt-on minority and majority investments that fit into a longer-term strategy in either an existing or new business unit. I liked having access to the operations-focused employees at the portfolio companies who were excellent subject matter experts - in diligence processes I think having these types of people who can think through a potential investment via a different lens is extremely underrated and an underrated source of (unmeasured) alpha. I also realized I like the "other" side of M&A post-close, where you now have to take over the reins and actually integrate, grow, and manage the business and you now have some manifest control over whether or not it will be a successful investment. I felt like there was much more to learn being on this side of things vs. being a "casual observer" in the public markets without ever developing something slightly beyond surface-level expertise.

Sources of capital were as broad as you can imagine - 100% self-funded with cash on hand, additional equity raises via public markets or PIPEs, public and private debt, co-invest with other funds, etc. Basically enabled us to consider deals of pretty much any imaginable size (save for like $20b+ industry-changing mega deals).

That's not quite right. It's tough to describe in much more detail than what I've already provided in the OP and other comments without potentially doxxing myself. I did do both minority and majority investments at the portfolio company level (and the portfolio companies are not small by any means), but I've also evaluated everything from $100m to $10b new investments and acquisitions in public and private companies at the holding company level. I also did a ton of corporate VC investing. So I really ran the gamut of the investing spectrum while there.

Vs. traditional PE: much more disciplined with our investments but also more flexibility. Not mandated to spend and deploy capital, which allows the firm to be much more selective in waiting for the right opportunity to present itself. That obviously has its own set of pros and cons. Access to a ton of capital via cash on hand, additional equity raises via public markets or PIPEs, public and private debt, co-invest with other funds, etc. Turn down a lot of deals presented to the firm by bankers that don't pass the smell test (or make no sense due to legacy/existing knowledge of whatever is for sale) vs. trying to force everything through an IC. Significantly better lifestyle (more in line with corp dev) but less pay. Smaller team, much more responsibility, and higher expectations for me as an individual than my friends in PE universally. Better and more reasonable people to work with. Definitely was not "banking 2.0."

Vs. traditional Corp Dev: not quite as much of a strategy component, but still exists. Bit of a broader mandate of things to look at given the structure of the company vs. a more narrow set of opportunities you'd consider at a traditional strategic. Small company and small team, so probably even more responsibility here than most comparable corp dev roles. Similar lifestyle (very minimal weekend work, typically done working 6 pm and often earlier), pay at the top end of corp dev bands. 

In my opinion, absolutely not worth it to try and switch. Exits to PE from most Lev Fin and Sponsors groups are fine. You're over-estimating the importance of specific group over bank in regards to PE recruiting. At my bank, LevFin and FSG had some of the best exits within the bank. Focus on what you can control: getting your story down and narrowing what type of PE you want to do and why so HHs have faith in their ability to place you, drill various forms of LBO modeling tests to the point you can do them with 100% accuracy in your sleep so this is a non-factor come recruitment, understand and critically think about all of your deals and know key metrics and develop a thesis for whether or not it was a good deal, etc. 

Also at my bank, while they would tout the ability to move around internally, it never happened even when people wanted it to. Those who spoke up with the desire to do so were then viewed differently. When people did have the opportunity to switch was at promotional junctions (i.e. going A2A, A2VP, etc.), or to do my bank's international rotational program.

Going to give broad bands. As mentioned I am not at all focused on comp (think too many people on this site are) and am more motivated by WLB, doing interesting work, and building a good skillset that can pay dividends later. More of you should focus on skill-building and getting good experience early in your career as opposed goal-seeking and solving for the highest all-in comp package.

An1: $140-160

An2: $150-170

TMT1: $140 - $160 (fixed comp)

TMT2: $140 - $160 (fixed comp)

Current: $160 - 180

I was getting pretty good looks from all the major funds. Went through processes at most MM platforms and a number of well-known SMs, was still in a few processes when I received and accepted my offer for the TMT role. HF recruiting is much more challenging and more intense than PE recruiting, and part of this as you mentioned is due to the lack of a commoditized standard structure like PE has. Some of the larger MMs had a bit of a more standardized and streamlined process, but not all. I've done everything from "IQ" tests while locked in a closet/cubby, to 30 minutes straight of brainteasers, to case studies, and everything in between. Really need to expect anything and everything. Another big factor that is massively overlooked that makes HF recruiting significantly harder is that you are competing against a much broader pool of candidates for the same seat: you're up against other IB analysts, IB associates, ER folks who probably have an existing relationship with the fund in question and know the space better than you, other HF folks looking to move up/downstream, PE folks looking to switch to public markets, etc. If you're a first-year IB analyst you're fighting a bit of an uphill battle, and you better be well prepared for HF recruiting before you even start your IB role. If you didn't live breathe eat & sleep the public markets before, it's going to be hard to prep as a first-year. You should already know what investment ideas you're going to pitch before you start recruiting (obviously these can change as markets move or whatever throughout the process, but you should also then have your next idea pretty quickly).

Showing your investing acumen via a case study or investment memo is probably the most important part of the process. This isn't "can you take this LBO modeling test" like PE recruiting; the expectations are significantly higher. A few places give a case study (Point72 for example) of a specific stock to research, others will expect you to come prepared with a pre-written investment memo (or three). They don't give you any guidance for these case studies either; the prompt is essentially "tell us what you think of (TICKER: XYZ)." I'd suggest having a "short" and a "long" version of your investment memos for these. The short version should be 1-2 pages and maybe some supporting charts and tables in an appendix covering the highlights and key points, and the long version can be as long as it needs to be but much more in-depth on your thesis (anywhere from 5 to 25 pages). Most people will only come with one or the other; having both will demonstrate that (i) you know their time is valuable (by having the short version prepped), and (ii) you didn't just do surface-level research and have a well thought out and developed thesis and understand what drives the business vs. what moves the stock, what the market is missing, how to model this business, what the major risks are, and what upcoming catalysts that will move the stock are. You're going to get grilled and pushed on your thesis; they may or may not agree with you but they're going to look to test (i) can you defend your ideas verbally and professionally, (ii) have you considered the other side and do you have counterpoints prepared, (iii) how do you act under stress and pressure, and (iv) your ability to remain intellectually honest and objective, in addition to other things.

Happy to go into more detail but hopefully that helps.

Initial thinking was it would be worth it to add some extra letters after my name (as I had already ruled out an MBA at that point) to (i) establish some extra professional credibility, and (ii) potentially give me a marginal advantage in securing my next job. I was very ready to crush Level I (scoring >90% on practice exams; had already started studying for Level II) before my exam was canceled due to Covid. Then it kept getting rescheduled/canceled, so I lost momentum; meanwhile, I ended up securing my current role in which nobody has the Charter. I don't think it's extremely necessary or helpful in the corporate development world for career progression, networking, etc. So for the time being, I've abandoned the idea of pursuing it. I mentioned this above as well, but there is a very real non-zero possibility I completely leave finance in 2-3 years time - if I get the CFA that will have ended up being a lot of wasted time and money. 

I'm not at all saying the CFA has no value or isn't worth taking. It definitely makes a lot of sense but only for a specific subset of people. The benefits largely hinge on (i) your current academic and professional background (if you are from HYPS and/or studied finance in undergrad and are coming from a BB probably not super needed as a resume booster), (ii) your desired long-term field within finance (are you looking to stay in ER where it is absolutely necessary or corp dev where CFA charter holders are spotty), and (iii) proactivity around making the most out of the CFA network. It just doesn't make much sense for me right now.