Background:
I didn't believe when people say IB is almost 100% group dependent. Culture, hours, camaraderie, relationships, even bonus.
I don't work for a BB or EB or a reputable MM. Some MM that occasionally gets some big deals but that's it.
Pay:
Okay I know people care about this the most. Your pay will be lower than your peers working in high deal-flow groups. Maybe a lot.
Remember that post where the founder of FT Partners paid employees minted coins with his fucking head on them? That's not even a bank with poor deal flow. That's just fucking cheap.
Both a cheap bank and poor deal flow destroys your banker's swag. You won't save much living in a place like NYC unless you live in a shithole with 3 roommates and don't go out at all when you have free time.
Hours:
Your hours will be substantially better than your peers because guess what, your group doesn't do a lot of deals ! That means less experience executing deals, so less execution knowledge, which is BAD when you lateral after say 1 or 2 years.
Nothing as a junior banker is difficult, and you can totally learn those transaction knowledge reading materials. However, you won't remember as well if you only read. That is like learning math. You don't know how to solve problems by reading the answers.
The only upside working in such a group is you have relatively chill hours. Although sometimes your MD and/or might want to work on some meaningless pitch that apparently goes nowhere. I even worked on an IPO pitch where the founder told us (I was in the meeting) they don't plan to list in 3 years. WTF?
Weekends:
You still get weekend work. This is banking after all, and you are on-call 24/7. I'll say during busy season --- live deal, 2-3 urgent perhaps meaningless pitches, etc. --- I worked all weekends with at most half a day to plan for personal events. Busy season ~ 50%-60% of the year. So you have plenty of weekend where you can plan ahead, with 5-6 hours of work per weekend.
Learning:
Not much because you don't execute as many deals. Participation could be on a deep level, but there is not enough repetition for you to form muscle memory. You work on a lot of pitches and pitches are the WORST because they are just boilerplate shit packs. If you hold different opinions on pitches, good for you.
Your MD is clearly not very capable of pulling in deals and your VP, who is willing to get stuck here working for this MD, is unlikely to be very capable. Thus, the learning is just not there because your VP should be the "bridge" to coach juniors and teach stuff.
Camaraderie:
You don't spend many late nights together, especially with WFH. People just want to go through the motions and go home. 3 new analysts still have no idea what a fucking DCF is or what should go into a comp set.I'm not saying I know all the details, but at least the basics.
Exit:
People don't really know whether your group has poor deal flow or not. However, details will expose you during tough interviews. As mentioned above, you can read answers 7 times, but it is not as good solving the problem 2-3 times. You need to do a lot of extra interview prep compared to groups with solid deal flow. Can still land good to great exit opps though. Seen it happen.
Final Note: this is NOT equivalent to a lifestyle group.
Lifestyle group = street comp + seniors who actually care + VP who is not a maniac or complete idiot + at least some learning
Bad deal-flow group = low comp + seniors who may or may not be maniacs pitching + VP who is clueless managing workflow + not much learning happening + seniors keep saying "our group just had a bad year. Things are getting better, just look at that pitch were are working on"
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damn bro - your firm is the same as the one described? Might have hit you up at the Japanese bank on the 3rd floor already the way you deleted your comments.
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Agree with all the notes above but one notable exception: I've actually seen worse "hours" at banks with low deal flow. The reason: "if you aren't working on a deal, you need to look like you are finding one".
Honestly, at firms with high deal flow there are usually good associated fees (and fees/headcount). If you are generating good fees, no one cares how you are spending your time. If you don't know where your next meal is coming from, you have to at least look busy and I've seen low deal flow banks get "political" really quickly. Suddenly deals are over staffed, no one is actually doing anything and there is terrible facetime. Also a lot of "boil the ocean", "go no where", and "this legit makes no sense" pitches. Also lots of "false deadlines". Because MD's and other originators (who don't have live deals) need to tell their heads of IBD how busy they are and how much imminent stuff they have so they don't get fired.
Canadian banks are TERRIBLE for this.
Have heard similar things from a banker who lat'd from a Canadian Bank. His experience sounded PAINFUL in return for very little in the way of personal development.
lol its always the guy with the worst deal flow that takes up the most airtime in pipeline meetings spewing pure nonsense
Excellent post, +1 SB. One thing that isn't talked about as much on this site is what it is like to work at banks / funds that don't consistently excel within the M&A space. When I was in UG I just assumed if you went to any IB / Corp Dev team / PE fund, they would know how to do M&A well. After all, each team is being led by senior executives with all sorts of impressive credentials (e.g. M7 MBA, high # of YoE at different industry leading firms, etc.), so how is it possible that they don't know A. the deal process, B. how to execute it as smoothly as possible, and C. how to close the deal and begin to realize synergies ASAP.
I don't wish to rip into any of my past or current employer (s), but lets just say man I learned the hard way that this isn't the case. Also the firms I'm referring to aren't just working on sub 10 mm deals, but like sizable transactions of 100 - 300 mm. Yes they aren't BB sized deals, but they aren't immaterial or tuck-in deals.
I have worked on transactions that are an absolute train wreck. Im talking signed LOI for almost a year. Being on the buy-side for this one, it was entirely our fault. No internal alignment, people signing off on deals then changing their minds days before close, suddenly entire comp structures need to be adjusted. Don't even get me started on the number of things that can go wrong from an integration perspective post-close.
I have worked on deals with bankers trying to sell businesses operating at a net loss for the past four years but stating "look at their established position within their current market". In the case of the latter, the bankers wanted a high revenue multiple, on par with what you would pay for a comp with a 15% EBITDA margin. Ummm, no?
Someone should start a thread on the most absurd things that have happened on M&A deals, because based on my own limited experience I assume there must be some very entertaining roadblocks.
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