Q&A with Healthcare Investment Banker

@davnu is an IB associate and former healthcare consultant. The following is a Q&A about his experience and the healthcare industry. Thanks for taking the time to provide your insight, davnu!

Did you go to a target / non-target undergrad?
-I went to a midwest target school and have a B.S. from the Engineering school.

Do you have a graduate degree (MBA, MSF, etc.) and if not, do you plan on getting one?
-Nope and I do not have any plans to get one.

How did you break into your current role?
-I started off my career in management consulting at a firm that specialized in life sciences working on projects that covered transaction advisory, drug pricing/market access and general strategy. An alum that I had networked with while in college had reached out and mentioned they were looking to hire some new people to join their expanding and new-ish investment bank, so I went and met the team and came out with an offer to join the life sciences banking group.

What area of healthcare are you most involved in?
-Our life sciences banking group is predominantly focused on micro to small-cap biotech/med devices companies (less than $5bn market cap). Being a boutique bank, I've been fortunate to experience a lot including equity/debt capital markets, M&A, structured financings and business development. We also have a platform that allows for co-investing in financings that we execute, so there is some due diligence associated with that.

How did you become interested in healthcare?
-I always had an interest in college and although I majored in engineering, I ended up taking a few bio/chem classes that really drove me to pursue the sector during my senior year. My college internships were all in finance (buy-side, banking, trading) but I entered consulting because I knew I needed to cut my teeth somewhere fundamental and life sciences focused to thrive in the industry.

How do you stay up to date with industry knowledge?
-From a job perspective, being involved in capital markets forces me to stay on top of the news all the time whether it's from meeting new companies and hearing their stories or reading through my RSS aggregator (I've used AOL Reader ever since Google shut down). In terms of news outlets that constantly publish and are relevant to the industry, I follow: Fierce Biotech/Pharma, The Daily Scan from GenomeWeb, BioSpace.com and The Big Red Biotech Blog. We have some accounts similar to FlyOnTheWall and StreetAccount that also keep me up to date on transactions in real-time. Twitter is also an amazing resource to monitor news live and even see news break before it hits the tape. There is an incredible and active community of sell-side, buy-side and scientists that constantly interact (my suggestion is to start by following Mark Schoenebaum who has recently become active on Twitter and follow the guys he interacts with on a regular basis).

Do you want to stay involved with healthcare moving forward?
-Of course -- I think it takes a certain personality/obsession to want to be in this industry for a long term. From what I've seen in my short career thus far, everyone that is successful within healthcare is here for a reason. It could be as a result of having a family member that was affected by a certain illness, or someone has met people who have been a victim of our healthcare system, or just has a desire to make a meaningful impact in other people's lives.

What are your thoughts on the Affordable Care Act and the future of healthcare?
-There will continue to be significant hurdles until the ACA will be viewed as a positive net effect, but at the end of the day, everyone should understand that our current healthcare system is broken and the ACA is forcing everyone to re-think how to approach issues of rising costs and underpaid providers(some). My experience with the ACA is fairly deep, but I do not pretend to have the expertise to be able to determine the outcome of what the landscape will look like even 2 years from now. I do appreciate some aspects of the ACA for forcing providers to drive down healthcare costs and there are a lot of therapeutics that I believe will be approved in the near future that will not sacrifice quality of care or treatment paradigms while meeting new regulations.

How does your day to day differ from your counterparts in other industry groups?
-Although every industry offers a depth in knowledge, I think the learning curve in healthcare (and energy, in my opinion) is tougher because of the expertise necessary to excel. I find myself continuing to learn topics that may not be relevant to my current projects/deals to try to stay ahead of the curve. Otherwise, banking is still banking, regardless of industry. Playing in the micro/small-cap space does mean that we work with some relatively messy/uneducated companies and it requires more coaching and convincing to management teams of how the landscape is changing.

What does the deal flow look like for your group?
-We close anywhere between 2-4 deals per month (higher more recently with the financing surge in the sector) so some weeks are slower than others, but we're never not busy.

What do you like most about your job? How does your current role compare to being a consultant?
-The pace is much faster than expected, the responsibility is immense, and I find everyday to be dynamic and a learning experience (sorry if you've heard this before). Consulting was a great experience for me that gave me the platform to learn slowly and take responsibility as I felt comfortable. It's a much more supportive environment to be in, whereas finance absolutely requires a lot of self-drive and ambition to take advantage of opportunities.

What’s your end game? Move up the ladder? PE? Something entrepreneurial?
-My bank is fairly new and the opportunity is there to continue to build a business -- many times I compare it to a startup environment where everyone's (including MD's and top management) door is open. My end game used to be buy-side in a fund focused on public equities (hedge or mutual), but I've become much more open to letting my experiences take me somewhere that I'll continue to enjoy work when it comes time to part ways.

Do you have any advice for those looking to break in to IB?
-It's not the end-all, be-all of jobs -- the pay is good, but the passion has to be there to be happy working long hours and putting forth 100% every minute. IB is a great place to learn and gain exposure to many different aspects of finance, but don't be discouraged if that's not where your path takes you. If you HAVE to break into IB, make sure you have a compelling story and show your ambition/passion in interviews. Many others have covered and provided advice on how to get an interview and my thoughts are in line with the general consensus.

Do you have any insight on how to break into healthcare focused PE, VC, or Asset Management?
-HC PE - IB or another corp dev role that is operations or BD focused are probably the best routes, with IB being the easiest way.
AM/HF/VC - IB and ER are feeders for quite a few AM/HF funds. Having a PhD/MD and going to buy-side out of MBA is also a route I've seen many people take.

Are you open to follow up questions from the WSO community?
-Of course, happy to share my thoughts and I hope people found my above answers useful.