Regional vs. sector team BB - London
Hi everyone! I have to list my preference for an IBD internship at a BB. Currently deciding between a regional team (with a good culture and friendly hours) and C&R/TMT (my preference of sector teams that are generally considered sweaty).
Assuming I would get a FT offer, which one would you pick? Endgame is growth equity (TA Associates, Summit Partners, General Atlantic, TCV,...). Will the sector knowledge help in recruiting in the future? This is for London. Thanks for the insights/opinions!
I prefer industry but this is personal preference. You will gain a better understanding of a sector vs being a pure play "Coverage" banker where industry teams jump in where industry experience is required. Only benefit in general is that you may be familiar with "local" execution considerations - as for the takeover code in the UK. But otherwise much more value add to be an industry banker.
Not OP but thanks for your reply.
Something I've noticed is that regional coverage often get far more deals on their CV than their industry counterparts. While the industry guys might lead the process and get a good understanding of a few deals, the regional guys will dip in and out of several. Of course, I understand that seeing a deal all the way through and holding the pen on the model etc is of great benefit - but the regional guys often look very good on paper. Just wondering if you have any thoughts on this - are recruiters savvy to this, or is it more so that the industry guy would likely perform better in the interview when asked about their deals?
Thanks!
You don't need 20 deals to exit, in fact being able to speak well about 1 deal will be much better than doing 5 deals and not being able to articulate well the deal/industry/company trends.
Thanks for the quick replies! Do you think that ~9 months technology growth equity experience with deal experience (as an intern though) can make up for the shortfall at a regional coverage group? For me the most important aspect is the exit opps to growth equity... I wonder why you won’t learn the same stuff as someone in a tech/C&R team when you work on a tech/C&R deal in a regional coverage team.
If you have a basic understanding of the different tech business models (ie SaaS, Market places, etc) it does not matter, anyone can exit to growth equity would just be an easier sell coming from TMT.
Well sure the person will learn about the industry but only in a limited proportion. The main part of the "industry/sector" expertise will be done by the industry team, thinking about all the drivers will be done by industry, a good part of the benchmarking will be done by industry etc whilst a country banker will deal with all the regulatory stuff (ie anti trust, M&A regs, timetable) and frequently cover names in very specific industries where they do not understand how to model these names (ie FIG, PUI given how large/important these insititutions are at the country/state level). To me the sector bank are more "coverage/relationship" bankers, where as the industry bankers are industry experts. The reason why hours are worse for Industry bankers is partly because they are doing more on a given transaction than country bankers.
In my opinion, you will have a much better shot at growth equity from a TMT sector team. You will hopefully develop better understanding the tech ecosystem and certain business models.
Sector teams in my experience do much more modelling and general heavy lifting during transactions relative to some country teams (it is not like that across the board, so please excuse this generalization).
Just to add on top of the comments already made above, I would place a relatively high weight on team culture. Working in IB with a sweaty team is dreadful, and you have to have some life still in you when you interview for exits. As others have said, as long as you are able to place into a decent team, you will be fine because it's not a contest based on how many deals you have done, especially in growth equity I would say.
Anyhow, you are the only one that can make an informed choice. Congrats anyway for the internship!
I think what is absent from the above comments is how growth equity is different to lbo pe and what consequences this has. In large-cap PE especially, you are basically doing banking 2.0 with a constant inflow of transactions where M&A/transaction expertise, strong modelling and financial skills are absolutely paramount. As such, deal experience is of utmost importance as this will provide you with the relevant skills, therefore sometimes good product teams (MS M&A, CS Sponsors, maybe BAML M&A) can be strong places to be since overall exposure to deal flow is very high.
However, in Growth Equity people think about investing much more thematically and some funds operate an intense sourcing model. As such, it is at least expected that candidates will have a very solid footing in certain industries that translates into an understanding of investment considerations and niche areas of interest. This can definitely be obtained by transaction work but overall industry coverage is generally quite useful for developing this toolkit. On the other hand, having built the craziest multi bn merger models that make your xls crash might not be top of the agenda. In my opinion, country coverage teams could serve similar function if you know that the funds you target have country teams where an understanding of the market drivers is once again very important.
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