Sovereign Advisory Resource
I have received several questions in DM about Sovereign Advisory. So I thought it would be great to share a complete post which I hope will be beneficial to people interested in SA.
First thing to know is the most prominent teams are based in Paris: Lazard, Rothschild and Global Sovereign Advisory (founded by Anne-Laure Kiechel, ex-Rothschild's head of SA). Rothschild may be weak in the US but it is leading league tables in France and Europe.
Recruitment is super competitive, I would say even more than in M&A teams. Most profiles have a double-degree (engineer x business school or economics x business school/Sciences Po), that said it is not impossible to break in with only a business school degreee (i.e. HEC) or coming from Sciences Po.
On first round you'll have a test focusing on macroeconomics, debt capital markets, bonds, public debt dynamics, knowledge about rating agencies and how they work. If you pass the test stage, then you have a 2nd round during which you will meet the members of the team, interviews will mix fit and technical, same kind of questions you had during the test, mini-cases with fictive countries, infrastructure financing etc. 3rd and final round is when you meet the MDs, generally less technical and more fit oriented but be sure to master your technical, some will lead that interview as if it was the first round, be ready.
Main notions to know: Balance of Payments, Deficits, key ratios, interest rates, how central banks work, Financial Statements, rating agencies, IMF and World Bank roles and functioning, how to restructure a debt, different types of lenders, what is a default, fixed income, etc.
In terms of work, it is super interesting. You work with Governments on debt restructuring, debt issuance, helping countries with competitivity, rating, Infrastructure financing, state-owned companies and even working in M&A deals if a Government is involved. Work hours are still brutal, so your motivation to join should not be seeking a better WLB. You will develop great skills in modelling, knowledge in many subjects not only finance, but also economics, politics, and have a great culture. Interlocutors are the highest level you can think of: Presidents, Ministers or Treasury Directors, and working with them on highly important subjects for their country is highly satisfying.
Teams are based in France but cover the whole World with mandates in LatAm, Africa, Europe, Middle-East and Asia. So you will be able to dive deep in several geographies. There are also regular travel opportunities, even though less frequent since the pandemic.
Salary: base salary is the same as for M&A teams, bonus I would say is generally slightly inferior than M&A of a negligible amount.
Hope it helps
Thoughts on Guggenheim NYC's Sovereign RX team?
I am based in Paris and do not know much about the activity in US, can't help sorry.
Mind if we talk in the DMs? Interested to learn more about the space.
Hi, thanks for these insights, I've been trying to get more info on this for a while. Do you know if it's possible to break into one of those groups if you're not graduating from a French school / are not in France during recruitment time (assuming you still speak French)?
The fact that you speak French is a significant asset and leaves you with a number of open doors. Of course it would have been easier to break in being based in Paris, but it costs you nothing to contact the guys on LinkedIn and if you have an interesting profile, they will invite you to the interviews I'm sure.
Yes... you have a whole world to cover not only Francophone countries. Also you get taxed like crazy in France... so unless you want a baby bonus then mmm
The American banks cover a lot of LATAM, APAC, Eastern Europe... so French there is irrelevant. If you do not speak any other languages then have super strong quant and macro skills and you will be good.
Also you may want to get actual transaction experience so stick to the top investment banks (Lazard, Rothschild, GS, Citi) or if you want to get macro experience then you can break in through going to the IMF, World Bank, central banks, rating agencies.
All DCM teams that issue sovereign debt are good places... these include all of the American banks, Japanese, Canadian, Spanish... Also French is only useful if you are dying to cover Francophone Africa only... there is also Spanish for LATAM, Russian for Eastern Europe, Arabic for the Middle East.
Also for sovereign debt you may want to go with the heavy hitters like Ray Dalio's Bridgewater... they do a lot of macro investing and all Ivy League. Also BlackRock has a financial advisory team... or just go to research
The top 3 American banks have these teams too and outside of Paris. I know they use names such as public sector financing or could be under DCM or the corporate bank.
Top schools in the states to get in include: Harvard, Columbia, Georgeotown, SAIS... some U.K. schools like LSE and ofc Science Po
Languages are plus (FRE, SPA, ARABIC, Russian)... because sovereigns are global. Most importantly quant and banking skills are key.
GSA is not an investment bank but like consulting or lobbying. For transaction work go to Lazard, Rothschild, Goldman Sachs, J.P. Morgan, Citi, Guggenheim because these are banks so they can do anything from issue a bond to liability management to restructuring to give these sovereigns a loan.
That’s a weird process and sounds more for an economist than banker roles.
Anyone here that wants to get into Sovereign debt should apply to DCM in top investment banks or macro strategy research at hedge funds or banks.
Sovereign Advisory as you outline is not only in France and in other regions nobody cares about Rothschild because it’s not bulge bracket. Nothing beats a Goldman and JP brand… that have sovereign teams not sure where they are located.
Networking is the most important, banker skills, language and top tier school
I see those BBs have some sovereign-focused teams but they seem super small and I could only find them based on Linkedin profiles, not even on the companies’ own websites. It also look like most people were lateral hires with a couple years of work experience at a rating agency or something along those lines. What would you reckon would be the best way to get your foot in the door as someone that is still studying for their Masters? Are there any SA-type openings for sovereign advisory? Thanks!
Hi there,
Thanks for your insights - very useful. With respect to WLB and working hours, I have heard it significantly vary throughout the year and specialisations. Would you be able to give me an average (eg 9am-10pm) and also how Lazar / Rothschild in Paris compare with GS, JPM, Citi in London / NYC ?
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