Investment Banking - Public Finance

public finance will be around forever bro

If you like it that's fine, but from what I understand it's a CLM unless you decide you want go to bschool

All analysts/associates I've talked to in public finance make the job sound pretty boring.

don't personally do it, but know people who have. its basically for non-profit clients (cities, state entities usually), and the work is mostly debt underwriting for them. you build a pretty niche skill set, so the exit opps tend to be weaker than in traditional corp finance roles. for example, given your client mix, you won't look at traditional financial statements as much as someone who was in say, automotives or healthcare would.

what do you mean by "how much money"

I have some friends that worked in PubFin at BBs. Here's some info:

1. Base for analysts is similar, but bonuses are much lower than you'll be receiving in CorpFin.
2. The culture for most public finance groups is pretty laid back. Analyst hours are generally 9-7 on average, so you won't be working the killer hours of CorpFin. However, in my opinion, it's definitely worth it to put in those hours, especially at the analyst level. You'll learn much more about the market and it will allow you to understand more than your generic muni bonds.
3. For PubFin bankers to move in hedge funds or private equity is very difficult. Your skill set is much more limited than what it would be as a CorpFin banker. I would think you'd need to try to transition into CorpFin and develop those skills to move into more lucrative positions.

From my understanding, Citi, UBS, MER and maybe GS have the best PubFin groups. It's clear that PubFin bankers don't get nearly as much respect as CorpFin bankers, but the lifestyle is better for sure. It may also give you a warm feeling in your heart knowing you helped the local park district buy a swing set and a sandbox.

pm me. used to do pub fin

Public Finance is arguably the unknown treasure of ibanking. Working in public finance your still an ibanker and get paid like an ibanker (however, you make less in bonus). the hours are managable, meaning you can see the sun during the daytime and the stars at night in the same 24 hour span.

the best part about public finance is the tangable benefit. unlike corporte finance, your never conflicted with ethical issues and can actual enjoy the public good that is produced due to your financing scheme.

http://www.wallstreetoasis.com/forums/public-finance-is-this-even-inves…

well yes, I wanted to know some exit options and what people have gone on to do.

Career Limiting Move.

John McClane is correct. Public finance analysts are probably the most likely (in my experience) to come back to banking after b-school. More than a few guys who decided to pursue associate positions within industry groups or execution groups did public finance beforehand. Unfortunately, there's still a significant learning curve, since the guys I worked with still struggled with both technical valuation and adjusting to the working hours.

The above is what i've heard as well, also don't have first hand experience, but know a buddy who was a public finance IB analyst--you are primarily a municipal bond banker for the most part but also interface with infrastructure/project finance teams. You are getting exposure to domestic local and state government clients, for example, and how they fund their operations, helping them find debt capital to finance things like schools, parks, bridges, etc. What I don't understand is whether they are an integrated coverage/product team (seems like it?) or whether they are just client coverage and then pass the buck to regular DCM to coordinate the actual bond issuance with syndicate.

Either way, I think you have the potential for a pretty comprehensive infrastructure financing background which can provide some interesting exit ops depending on how you play it. I'd start networking with some private infrastructure funds after you get a feel for what you are doing as they could be your next employer maybe if you ever want to get on the buyside. congrats and good luck!

Read this: http://www.KKR.com/infrastructure/infrastructure_overview.cfm; (Note: am not saying public finance is the be all end all background for infrastructure PE, as taking a quick glance at the team site on that link's webpage you can see many infrastructure professionals have generic M&A/industrial IB backgrounds--but i think that's more dependent on that specific pe shop's hiring preferences versus whether those individuals are Functionally superior to the infrastructure skillset you will amass during your public finance tenure)

General Public Finance is pretty Career Limiting...don't get me wrong, it is still investment banking and still pays the same, the problem is that you don't get to do the same hardcore accounting analysis that the IBD guys get. That being said if you can get into an industry group instead of a regional group (industry group would be Public Power, Transportation/Aviation or Not for profit Healthcare as opposed to "the East Group") it is a much better experience. In those groups it is much more project finance oriented dealing with more corporate like clients. Also, the industry groups actually provide some pretty good exit opportunities because specific expertise that you gain. General Public Finance is all the same...how many school district deals do you have to do before you know what's going on. On a good note the hours are slightly better than IBD counterparts.

What banks are you talking to?

I understand how the exit options into anything equity related can be very limited. I was just wondering how bad is it to go into DCM. Is the modeling that much different? Do hiring managers in DCM look down on anyone in Public Finance?

john, game - does this apply to infrastructure/privatization groups that may be warehoused under pub finance?

thank you for the info guys!

I'm curious about this also. I have a friend that will be interning in Public Finance at BAML and I may find myself there as well.

agree with what everyone has said. you get good experience but it isnt in the same caliber as what the corp fin guys will get since you get limited accounting experience. not to mention municipalities only have the debt side of the capital structure. a plus is that interest rate derivatives are becoming more popular so you will get exposure to this area as well.

As far as I know, infrastucture and privatization groups are almost always considered public finance (ie financing toll roads/highways or privatizing the state lotteries). So yes, I would say this does apply. However, those are the "bigger" deals in the sector.