Regional Boutiques are vastly overlooked in IB

Mitchtwitch's picture
Rank: Baboon | 134

I'm going to give a quick background of myself for context: 1st year analyst at a very small regional boutique not in NY. My shop is about 20 people.

So, I'm going to try to keep this short: Small regional boutique shops are super underrated on this site and I have a few reasons as to why: Hours, pay, and work culture.

1. Hours

Every time I get on this site, I see an analyst posting about how much he literally hates his fucking life because is VP asked him to change the theme of a CIM 15 different times resulting in him working 120+ hours for 5 weeks straight. In my experience, I consistently work less than 70 hours week to week. I do go over that frequently, but not by an insane amount. During a slow time, I even got away with under 60 hours in a week. Work-life balance is a real thing for me. Plus I rarely work weekends, and if I do it is maybe for 2-6 hours.

2. Pay

Yes you would have guessed correctly, the pay is not as high as the Street, but hear me out. In my research (which is totally up for discussion) I have seen that what I currently get paid, adjusted for cost of living, is the same or more than someone getting paid in NY. Additionally, even if my pay did turn out to be less even when adjusted for cost of living (which it very well could be), I think I would still be okay with it due to the difference in hours.

3. Work Culture

This is exactly how it sounds. The culture is what seems to be so much better than at BB or EB. My VP is more like my friend than my boss. The MDs are a little bit of a different story, but I still don't feel intimidated or talked down to. To add to that, my superiors respect me as a real person and not just a machine, yes they will ask for menial changes here and there, but it is never something that is completely outrageous to obtain (usually). They don't want to burn us out since their employee turnover is so low and they have limited amounts of people who can get the work done. Superiors are much more willing to help out rather than just order people around.

In conclusion

I respect the hell out of the guys in NY or other parts of the country working at BB and EB that do what they do; this thread was not intended to be a dig at the guys working at those shops; they are grinding harder than me, and in return they will get better exit ops as well. For me PERSONALLY work-life balance is a lot more important than the prestige of a BB or EB.

Just my two cents on the subject, I'd love to hear what people have to say about this. To clarify: This thread is not meant to be me swinging my dick around like my life is so much better, it's just meant to be a discussion of the underrated-ness of smaller firms outside NY.

Comments (31)

Most Helpful
Apr 26, 2019

Everything that you've said might be true, but you're missing a couple of crucial points.

Most importantly, an IB position in the major global finance hubs provides a higher career trajectory and more career optionality than working at a small, regional boutique.

Pay shouldn't be solely evaluated at a point-in-time, but rather as a recurring stream. Higher future compensation is correlated to trajectory and optionality. As a result, the NPV of future earnings is significantly higher.

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Apr 26, 2019

I totally agree with what you're saying.

I think it really comes down to the type of person. For me, I'm more of a small town guy anyway, so when looking long-term I wouldn't wanna live in NY my whole life or even a large portion of it. It's just a system of trade-offs or sacrifices to figure out what kind of long term objectives you are trying to obtain.

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Apr 26, 2019

No argument with any of that, but the fact that exit opps isn't in your top 3 (anywhere) is telling, and - I would argue - short sighted. The doors that open to you out of a BB or EB in a major city are far more in number and in quality than they are out of a regional boutique.

And no offense / just my opinion, but I would counsel anyone looking for an analyst role to ignore work life balance (and also not fixate on the last dollar of comp). We're talking about a job that is 24 months start to finish. There's a lot you should be able to suck up over such a short timespan.

Apr 26, 2019

Totally fair point.

I guess I should elaborate a bit on exit opps then. I guess I'm not really sure why I didn't include them, but I have already found and networked with several professionals in the PE space, which is what I'm looking to do after mt IB stint. There are actually many more PE shops in my area than I ever would have imagined and many of them are doing very well. Additionally, several of the past associates at my shop went on to some very successful positions in PE in the area, so I do have high hopes for that. I'm not quite as short-sighted as it may seem. Sorry for the confusion.

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Apr 27, 2019

To be fair, I feel like the type of person that is more attracted to regional boutiques is also more likely to look at IB as a career, rather than a means to an end for exit opps somewhere else.

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Apr 27, 2019

I think that could be true, but for me personally there is actually a fair amount of exit opps to small PE funds in the area, so I'm not planning to stay in IB forever. Although I wouldn't be opposed to staying in IB assuming I could make it to MD or a partner role.

Apr 28, 2019

Could be or could because options are more limited.

Apr 27, 2019

Sure, sounds great, but I think that you're doing a disservice in your description for a lot of regional boutiques that have much much different cultures.

There are smaller regional shops that are experts in their industry and are nearly as respected as GS/MS/JPM in those sectors. A lot of those guys are pulling the same hours and almost same comp as anyone in NYC.

Apr 27, 2019

I definitely can't argue your point on that.

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Apr 27, 2019

Lmao relax man, it's just a post voicing my opinion. Assuming you can read, you would have read that I said specifically the post is not about trying to lift myself up, rather I'm showing you can still be successful in IB outside of the normal prestigious BB and EB.

Apr 27, 2019

What city is this in? Curious as I would think the exit ops vary significantly between non-NYC cities (i.e. Dallas vs. Charlotte or D.C. vs. Philly)

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Apr 28, 2019

Offering a similar, yet geographically differing viewpoint here..

Born and raised in a non-financial hub in Australia. Plenty of no-name, regional-type boutique shops where working north of 60 hours/week is rare. Privately held and truly independent (no underwriting and/or research, just pure advisory) so we're typically able to co-invest our own capital into deals and transactions. I'm still studying full-time (am working at a similar shop part time) but know guys in their early 20s at similar shops who make 6 figures alone just in seed-financing from pre-IPO deals, on top of what is (admittedly less than) a BB type salary.

I guess the major downside is branding and ability to move into more coveted careers. Though I for one wouldn't mind, those who tend to join no-name shops (at least in Australia) are happy working in the lower-middle market and build a rolodex of deals and contacts in the process. The small mandates aren't making any front pages, but they tend to value their work life balance and personal compensation more than they do the prestige of being employed at a big fancy firm with an envious title.

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Apr 28, 2019

Far to many finance students have inflated egos and think that the laws of numeracy don't apply to them when they look down on regional boutiques. I totally agree with your point, and often look at peers who would prefer the large BB experience with a slightly bewildered mind. It takes alot of good fortune, and politics to rise to the level at a BB where you "career optionality" actually starts making some headway. For the vast majority of people, I would argue that a closer look into regional boutiques is very warranted.

Ty

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Apr 28, 2019

Well said. I know a guy who has just joined a top BB at a great team, all-in compensation is expected to be about US$130k based on colleague sentiment. He was really, really pissed off to hear about a guy similar to him (same school, same age, intellect etc) who nearly made 6 figures from exercising options which were granted to him (at a private independent firm) as compensation - this is on top of what is already a comfortable salary.

Some guys around me have joined bulge brackets as they have New York highrise ambitions, others want to become private equity investors. That makes perfect sense to me, but those who join with aspirations of being a lifer and justify the long, long hours seem to get very pissed at people who earn more, working less, at a no-name place.

I personally don't feel the need to join a BB (and practically speaking, I would have to relocate to do so anyway). On paper, I might be capable with some networking (target G8 school, 3+ internships in finance and decent extracurricular engagements) but for my lifestyle and location, the pros versus cons just don't weigh up. I am working part-time, but am currently co-founding a company (I am granted seed equity) which we will eventually finance and take public (with a target standard $0.20 raise implying 10x on my seed equity). Higher risk = higher rewards holds true I guess.

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Apr 28, 2019

I guess I half agree with OP. I think students considering IB should be focused on two things:

  1. The opportunity to learn the IB skillset of valuation, modeling, and business in general.

This is critically important because if you learn it well, it's transferable to so many roles down the road (not necessarily on exit from IB). PE, HF, VC, Corp Dev, even Ops and Marketing . . you name it. The opportunity to build these skills in the analyst environment is hands down the most important benefit of being an IB analyst.

And this is where the regional boutiques are indeed underrated. I wouldn't say boutiques are broadly better or worse than BB in this regard, but I would say they're about as likely as a BB to give you this learning experience.

  1. The opportunity for a good buy-side exit. This is less valuable than #1 IMHO but is still quite valuable and is the main reason I advise students to do whatever they can to land in BB/EB.

To me, all the other crap . . culture, pay, cost of living, hours etc etc . . pales in comparison to those two. You're in this for the long haul.

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Apr 29, 2019

I would agree on two points that aren't mutually exclusive:

  • Bankers at boutiques and smaller firms tend to get more exposure to the entirety of the deal process, and overall, receive a broader learning experience. This can make them very marketable for other jobs outside of IB/HF/PE.
  • Bankers at boutiques and smaller firms tend to have weaker modeling and writing skills from books I've seen (obviously there are exceptions and this is a stereotype). Those are critical elements for going buy side and can hamper their ability to get recruited for PE and even Corp Dev. It also can put them behind on a long-term IB trajectory vs. someone that worked at an EB/BB/MM with good training and maybe moved down market or to a smaller city with no larger players.
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Apr 30, 2019

That s all great news. How exactly do you find these regional boutiques?

Apr 30, 2019

Google (insert state) middle market investment bank
Google (insert city) investment banking
Make spreadsheet, email two MDs per firm with a tailored note about learning more, resume, financial analysis sample, bada bing bada boom interview

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Apr 30, 2019

The exit opps out of a regional boutique are horrible and that's the main reason why most people get into banking. Also, the hours are probably much better and pay much worse because you're working on tiny deals that people don't care very much about.

If you don't have any other options in Investment Banking then yes go for a regional boutique IB but if you have the option to work for any branded bank, that's a much better choice.

OP, you must want to stay in the LMM for your career then?

Apr 30, 2019

I have no problem remaining in LMM territory. Whether that be in IB or PE. I've really already made my decision as far as a career path, so now I've just got to follow it to the best of my ability and see where things shake out.

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May 1, 2019

1) Exit opps aren't better but at some shops you can work 45-60 hours a week and like the people you work with. You can lateral to BB if you really want the brand, get your carry on in MM PE (never gonna work for KKR), F5 BD, become an MD, that's just your ability to network.

2) Pay is very often just below street with a 20% lower COL and no state income tax or it can be 50k a year. Part of outreach is finding out which regionals rip off analysts and which don't. Doesn't include BD opportunities where you can get a direct % of fee.

3) Deal volume and size will be smaller, that's a fact. But if you're on a 20 man team instead of 100, your cut of the cake is bigger and path to the top is faster (1 yr to associate 3 to VP in some cases), plus exposure to all parts of the business if you actually care about learning or see yourself starting your own IB. You very quickly find yourself on 3-4 deals with a 2-4 team size where you are the sole analyst. Experience is great and when you make your fee that's not being shared around by many.

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May 1, 2019
  1. Hours are probs better which is the main draw I guess, but if you have any intention to lateral to BB then it's not worth it to start at a no name plus I don't think it's easy to lateral from a no-name to a BB. Maybe to a branded MM but probs not to a BB. Getting your carry on in MM PE will likely be very difficult as well, maybe in LMM PE...
  2. You can work at a branded MM shop in a non-NYC /SF city and get paid at the street while still living in a 20%+ lower COL city, so there's still really no reason to take a no-name regional boutique over any branded bank.
  3. How many 100 man deal teams have you heard of in IB? LOL. Most EBs have 1 analyst, 1 associate, 1 VP, 1 Director (maybe), 1 MD on even their mega deals, so I think the whole "yeah we work on smaller deals but we get to take on more responsibility" is honestly pretty much just a myth to try to help sell MM or LMM investment banks.
Apr 30, 2019

curious to what base/bonus can an analyst and associate can expect in regional IB roles?

Apr 30, 2019

You can probably find many careers that are better than mega-city BB/EB wrt culture, work life balance, and occasionally pay (adjusted for cost of living)

I don't think those factors are why people pick banking though. They want to live in a mega-city, work on the best deals, and network with like minded ppl

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Apr 30, 2019

Definitely dependent on boutique - have a couple buddies at regional boutiques that hate themselves because their senior people think they legit compete with nationally recognized firms so they kill the juniors, yet pay below street.

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May 2, 2019

From what I have heard this happens a lot (I personally work at a regional boutique) but you also have a lot more value/leverage at your boutique than most analyst have at their BB/EB/MM. Especially if you are outside of NYC, due to the plain fact that not a lot of people don't move states to go work at a regional boutique, so you only have to deal with local competition. If someone is moving states to work at a regional boutique they are most likely not going to be a top bucket analyst. It is harder to recruit at regional boutiques outside of NYC, so if you are a decent analyst and your superiors have any clue of what's going on, they know you can probably easily lateral and they will pay up when they have to. There aren't 1,000 applications sent in overnight when positions open up, you are a lot more valuable.

May 2, 2019
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May 2, 2019
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