Should I leave my current position for a Valuation firm?

Hello all,

I currently work for one of the major oil companies. I've been working in a credit analyst role for a year now straight out of undergrad. I've been networking and I've managed to network well with a senior managing director at a Valuation firm that happens to do IB deals as well. The guy is an alum and I've been communicating with him via email for the past 6 months. I finally met him last week and we had lunch, he hinted that they may need an analyst after February or March and he said he would recommend that I get some consideration. I know this guy holds weight at his firm since he's a one of the five stakeholders of the company and he's relatively young (35ish).

Now, my question for my fellow monkeys is this.....should I quit my comfy and well paid job at this oil company for experience at this valuation firm, who, might i add, has pretty decent brand recognition nationally? Or should I stick it out at this major oil company since I just received a 10% increase in salary and might get a 12% to 15% bonus in a few months (not much by finance standards, but you gotta understand i work at MAX 40 hours a week!).

My end goal is to be working at an energy private equity firm.

Thanks

Comments (15)

Dec 9, 2011

Assuming that the pay is comparable I would definitely take the opportunity.

Dec 9, 2011

If you don't want to go the corporate route, then this seems like a decent stepping stone. You're in Houston, I assume?

Dec 9, 2011

I'm about to be in Houston. I'm about to be relocated. And yes I'm not at all interested in the corporate route. I would hate life if I had to do revenue accounting or something as my next rotation.

Dec 9, 2011

Given your goal, I am not sure it is so clear cut. What do you actually do in your current job?

Dec 9, 2011

I manage and evaluate risk for a set of companies assigned to me. I basically have to analyze financials and see what kind of risk a company has. I have learned quite a bit in this year as far as the energy business goes but I've become very tired of my job. I've been performing well and just received a salary increase recognizing my hard work so now I'm sort of split on what I should do. The perks at this oil company are pretty damn sweet, very laid back culture, i get to use the company jet when I fly down to Houston...i would love to come back to this company wayyyy down the road but for now i feel like i need some technical experience to give my career a boost.

Dec 9, 2011

Is this Duff and Phelps by any chance?

Dec 9, 2011

Have there been past instances where this valuations firm produced analysts/associates/etc that have gone on to private equity (directly, and where they didn't have prior strong names on their resumes)? Generally, what are the exit opps for the firm you're considering? If they haven't been great, I'd be tempted to stay at the large oil co. where you're doing well and can potentially gain more industry experience over time (and possibly move into energy PE as an industry expert, as opposed to the 'IB finance' guy) down the road.

And if you're possibly considering an MBA later on, I think the industry experience that can be gained at your current firm could make you stand out more than being a valuations guy (because then you'll just be lumped in with the other IB/PE/HF candidates, and you'll likely fall short compared to the bigger names).

Dec 9, 2011

^^ what kanon said..

Dec 9, 2011

@Kanon - The MD I spoke with was very frank and told me that many analyst at his firm leave after 1-2 years to big banks or whatever else they wish to pursue. The firm has about 30 to 40 people and they have clients all across the country and some international as well.

I am hesitant but I feel like I should be willing to take risks in my career, especially since I'm young and am not tied down to anything at the moment. If I can get that technical finance experience then I feel like I can apply those skills in a PE role down the line. You're right, industry experience is important but I will have more than a years worth of experience at this O&G company. If I can get the technical skills required for PE, I feel like my goal would become a little easier to accomplish....let me know if you feel different.

Thanks all, I appreciate all the advice.

Dec 9, 2011

Well 1 year of experience doesn't really count as industry experience. 3 years might, and could significantly benefit you. How does comp compare between the two jobs? As I said before, this is a tough call given your end goal, and as others mentioned, I agree that staying at current company will set you up better for b-school.

Dec 9, 2011

I'm at 70K+ all in at this oil company for this year. I'm very comfortable with this. At the valuation firm I'm not really sure, but they have some people with strong backgrounds from impressive schools so I'm thinking the salary should be competitive. Plus, the MD told me that bonuses on a good year can range from 50%-100%. He said the minimum bonus given each is about 25% of your salary.

Money is important but it is not my primary reason to make such a move, I would be doing it mainly for the experience of building out models and making assumptions. That seems interesting to me. 1 year is very little industry experience for sure, I'm just trying to weigh my options at this point...

Feb 24, 2015
pacman007:

I'm at 70K+ all in at this oil company for this year. I'm very comfortable with this. At the valuation firm I'm not really sure, but they have some people with strong backgrounds from impressive schools so I'm thinking the salary should be competitive. Plus, the MD told me that bonuses on a good year can range from 50%-100%. He said the minimum bonus given each is about 25% of your salary.

I find this hard to believe for a valuations shop. I worked at a large valuation firm and bonuses blew. If you want to work on your financial modeling skills, trust me, you do not need to spend 2-3 years at a job. You can beef up your financial modeling skills in your free time in about 3-6 months by building financial models and taking classes (if needed).

I was reading some O&G articles yesterday and it pointed out that the O&G industry is going to be a hot spot for PE firms, given the liquidity crunch some O&G companies are going through. I would leverage your industry experience to try to break into an O&G focused PE shop right now. It may be a long shot, but some MDs may value your credit experience in the O&G firm.

-Slim

Dec 9, 2011

See it from an exit standpoint - the MD was being frank with you because most analysts burn out in a couple years anyway and don't want to go anywhere near an investment bank. If it is PE that interests you more from an investment structuring perspective as opposed to an operational perspective, the IB experience will definitely be valuable. The other thing you should consider is whether the O&G sector interests you enough to want to stay in it the long haul. If not, you'll gain some valuable generalist experience at this bank (assuming you're not going to an industry group) which will be highly transferrable for diversified PE. If you're doing it just to come back to a company like this, I'd say wait it out a year more and see what you learn. Go to b-school and then make a well informed decision.

Dec 10, 2011
johndoe89:

See it from an exit standpoint - the MD was being frank with you because most analysts burn out in a couple years anyway and don't want to go anywhere near an investment bank. If it is PE that interests you more from an investment structuring perspective as opposed to an operational perspective, the IB experience will definitely be valuable. The other thing you should consider is whether the O&G sector interests you enough to want to stay in it the long haul. If not, you'll gain some valuable generalist experience at this bank (assuming you're not going to an industry group) which will be highly transferrable for diversified PE. If you're doing it just to come back to a company like this, I'd say wait it out a year more and see what you learn. Go to b-school and then make a well informed decision.

Good post.

OP - think about your time frame and your goals. You are correct in your thinking that financial modeling skill sets will benefit you for PE, but in order to get to that you may not be able to get to it directly (re: O&G --> Valuations team --> larger bank --> PE) and keep in mind the time you need to spend in the Vals team before you can make the jump to IB and the time you need to stay there before you could jump to PE. Also recognize that depending on the type of PE shop you want (if you care about size of fund, for example), some are very strict about hiring analysts during certain times and grades. So you need to be prepared to put in some time in Vals AND IB (most likely) before getting to your end goal. And even with IB, getting into PE is not a sure thing - quite competitive, and highly dependent on the market and whether more PE funds can raise capital and therefore need bodies.

As well, if B-school is a possibility, you need to take that into consideration. If you plan to do b-school, it may be better to stick it out in your current role for the o&g industry differentiator vs. IB/finance. But in addition to that, the jumping around between jobs also means you don't get as much to show for each role, because it takes time to ramp up on responsibilities and goodwill in a new job, so you have less to write about for b-school, probably less supporters (to write recommendation letters) and also to b-school - it'd be harder to present a coherent story on your steps.

That said, one can't assume b-school --> PE, because a lot of people that do go that route had prior PE experience before, or at least very strong IB or consulting experience prior to b-school

I know what I wrote doesn't exactly give clear cut answers, but hope it's helpful for your thought process.

Dec 12, 2011
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